By Bob Dinneen, president and CEO, Renewable Fuels Association - 02/24/14 07:09 PM EST
The Environmental Protection Agency’s (EPA) proposal to lower the renewable fuel standard’s (RFS) conventional blending levels for 2014 doesn’t acknowledge reality — it ignores it (“EPA gets real with RFS,” Feb. 21, The Hill’s Congress Blog). In reality, the U.S. Energy Information Administration’s Short-Term Energy Outlook in January forecasted 2014 gasoline demand at 134.75 billion gallons, up slightly from 134.60 billion gallons. Gasoline demand is clearly rising, not falling.
If the EPA goes through with its proposal to reduce the conventional blending levels from 14.4 billion gallons to 13.01 billion gallons, the implications will be felt nationwide. Farm income would fall, land prices would decrease and corn prices would sink. The demand for gasoline would increase, leading to higher gasoline prices for consumers. Jobs would be put at risk and investment in next-generation biofuels would stagnate with the lack of certainty in the market.
E15 (15 percent ethanol, 85 percent gasoline) is approved by the EPA for vehicles 2001 and newer and is now available at 60 stations in 12 states. Additionally, 70 percent of the top 20 vehicle models for 2014 are approved by automakers for E15 use. The naysayers may express concern over misfueling, but their anxiety is misplaced. E15 has been driven over 50 million miles with no known cases of engine problems or misfueling.
Additionally, E85 (85 percent ethanol, 15 percent gasoline) is available at more than 3,200 stations nationwide for use in flex fuel vehicles. Professors Bruce Babcock and Sebastian Pouliot of the Center for Agricultural and Rural Development at Iowa State University published a study titled “Price it and They Will Buy: How E85 Can Break the Blend Wall.” And what does the study conclude? Exactly what the title indicates: that increased use of low-priced E85 can break the barrier of E10. They state “Rather than being a physical barrier to increased ethanol consumption, the E10 blend wall is an economic barrier that can be overcome by increasing the incentive for drivers to use E85 to fuel their vehicles.”
And as we look to the future we find that the future is here today. Just look at Ineos in Florida and you will see the production of cellulosic ethanol. Additionally, Abengoa Bioenergy, POET/DSM, DuPont and Quad County Corn Processors are all expected to come online this year. Next-generation biofuels are not a pipe dream. They are right here right now.
But it is vital that we continue investing in next-generation biofuels. A reduction in the RFS would create uncertainty and investors need certainty. Conventional ethanol is the foundation for next-generation biofuels and investors need to know that the foundation is solid.
Summing this all up, the proposed reduction of the RFS blending levels would harm consumers and future innovation. It’s time for Washington to keep its word and let the RFS work as it was intended. No reduction, no repeal.
Wall Street gambles as middle class struggles
From Richard Hunsicker
Wall Street has many meanings. One is a place to invest your hard-earned money. However, it is no longer the place for investing, because it is now a worldwide gambling organization managed by professional gamblers. They’re not the casino kind who give you a fair shake, but the stock trader kind who have no ethics.
Your large fund managers, named A, will drive a stock down by selling millions of shares as another fund manager, named B, buys it at the lower price. Then fund manager B will take a different stock and sell millions to drive the stock down so fund manager A can buy it at that lower price.
This is how big funds do business on the backs of Americans who are caught in the middle. Look at the history of the sales on the Dow Jones and judge for yourself: There is no investing; it is all gambling. Buy today and sell tomorrow.
The middle-income earner is like a tennis ball, being hit by big-funds managers. Wall Street is making billions, while the middle-income earner is struggling.
A 25 percent surcharge should be added on any stock sold within a year of purchase.
The Villages, Fla.
Keep bipartisanship going with veterans bill
From retired Col. Byron L. Cherry, U.S. Army
The Hill’s Feb. 17 article “Cooperation scarce in ‘year of action’ ” noted that both Democrats and Republicans support legislation to help veterans find jobs, but it neglected to mention that they disagree on how to pay for it, with Republicans favoring deeper cuts to offset the spending.
I hope both parties will work together to find the necessary funding. If that means cuts to lesser priorities, that shouldn’t be an obstacle.
For example, one bipartisan budget study suggested cutting back the Pentagon’s $1.5 trillion Joint Strike Fighter, which is already nearly a decade behind schedule and billions over budget. Replacing some JSFs with other equally capable fighters could save more than $40 billion, which is more than twice what is needed to fund the veterans legislation. Maybe this would give the Pentagon a chance to work out some of the airplane’s kinks as well.
Congress seems to be on a bipartisan roll. I urge lawmakers to keep it going by passing much-needed veterans legislation.