12/09/2009 EPA's Failure to Approve E15 Ruling: 490,000 Jobs Prevented

David Blume – Executive Director I.I.E.A.

EPA's Failure to Approve E15 Ruling: A Quiet End to American Energy Independence

Delay Prevents Creation of an Estimated 490,000 Non-exportable Jobs, Impacts BioFuel Availability and Grain Futures for 2010.

Over the last several months my organization, the International Institute for Ecological Agriculture (IIEA), along with farm organizations across the country, numerous state and national representatives, environmental agencies, and ethanol producer associations, have been advocating for a seemingly minor Environmental Protection Agency (EPA) ruling change regarding the amount of allowable alcohol fuel that can be used as a gasoline additive across the country.

Why did we need this change? States have tried to raise the alcohol requirement in gas to 15% or in the case of Minnesota to 20% to keep millions of fuel dollars in the local economy, to save tens of thousands of direct and indirect alcohol-based jobs, reduce the cost of fuel to its residents, and reduce poisonous tailpipe emissions, the oil companies refused to comply. They hide behind an out of date 1980’s EPA 10% rule claiming, “Sorry we are complying with the EPA maximum of 10% so individual states can’t make us buy additional fuel.”

On December 1st EPA was to announce whether increase its maximum alcohol addition to 15%.  To some this ruling seemed about as significant as the United States Department of Agriculture’s elimination of a regulation governing the length of buggy whips.  Hidden in this almost meaningless line of regulatory detail is a massive and devastating blow to: agriculture, the development of hundreds of thousands of non-exportable green jobs, the building of clean cars, dependence on oil from hostile dictatorships, and the much ballyhooed conversion from fossil fuels to renewable fuel. Rather than move forward with all these positive agendas, the EPA decided they needed another six months to further study on the issue.

Alcohol has been, by far, the most studied additive to gasoline ever. There are countless studies (some of which I perform and others I cover in my book Alcohol Can Be A Gas!) that demonstrate the benefits of alcohol’s clean, cool and filth-free output. The December 1st non-ruling sits in direct contradiction to the fact that the EPA originally demanded as part of the Clean Air Act, that alcohol be added to gasoline in order to reduce gasoline’s extremely toxic emissions. It beggars the imagination to contemplate that the EPA now questions whether 15% alcohol raises or lowers emissions.

In my book I demonstrate dramatic reductions in toxic emissions from gasoline directly related to the increased amount of alcohol additive.  In fact, the already approved 85% alcohol mixture sold at the pump as E-85 can be as much as 90% lower in toxics. For Alcohol Can Be A Gas, I performed a study with E50 or 50/50 alcohol, the maximum amount of alcohol many vehicles can use without modification.  I showed a 94% reduction in nitrous oxides (NOx), the brown stuff in smog, an 83% reduction in carbon monoxide (CO), Dr. Kevorkian’s death gas, and a 25% reduction in hydrocarbons (HC), soot, in a 1987 3/4 ton pickup truck.   At 100%, alcohol exhaust is more than 99% toxin free in all categories. In tests I did on jet engines with astronaut and aerospace engineer Gordon Cooper in the 1980s, we were able to demonstrate that the exhaust coming out of an alcohol-powered jet engine was cleaner than the Los Angeles air going in.  I sometimes humorously say that this translates to alcohol being 105% cleaner than gasoline. The conclusion is obvious to anyone short of an oil sheik, or apparently an EPA bureaucrat: the more alcohol you add to gasoline, the lower the emissions of carbon monoxide, hydrocarbons, and nitrous oxides.

The EPA can ignore my review of studies, but the real proof beyond any controlled study is the living example of Brazil.  Today 85% of the cars in Brazil run on 100% alcohol (available at the pump.) All of the rest of the gasoline cars (so old they are not fuel injected) there run on 24% alcohol and have for decades. If the issue for the delay, as the EPA claims, is the ability of older cars to cleanly run high alcohol fuel blends, then the Brazilian experience should more than satisfy their curiosity.

That Brazilians that have older fuel injected engines originally intended for gasoline only, have been routinely mixing low cost alcohol with gasoline 50/50 every time they fill up since gas prices rocketed-up 10 years ago.  This mix, called rabo de gallo, a nickname for a mixed cocktail, requires the driver to use two pumps to fill their car. The EPA has reams and reams of data and peer reviewed studies from Brazil to rely upon to make its decision to permit alcohol levels higher than 10%.  But better than that they have decades of real-world experience of alcohol blends reducing pollution that they are currently denying exists in delaying their approval.

That begs the questions: what does the EPA delay portend for our country? 

First of all, unlike bankers or oil companies, alcohol fuel plants were not beneficiaries of bailouts. Because big oil buys 99% of the alcohol produced in the US, by default it is the one customer for alcohol fuel plants. When oil companies refuse to buy more alcohol than is required of them by law, even when the alcohol is less expensive to purchase than petroleum octane boosters, alcohol plants have to either take prices that are lower than the cost of production or shut down. Many production plants that are not shut down are limping along at half or two-thirds capacity.

Last year and in 2009, numerous working farmers who had contracts to sell their corn to alcohol plants (that subsequently went bankrupt) lost everything. With the enormous surpluses of corn the U.S. has produced over the last three years, literally billions of bushels go unused so farmers have nowhere to sell contracted produce that stalls due to financial default. 

On Labor Day this year, when 9-octane premium gas in California was $3.53 a gallon, 105-octane alcohol in Wisconsin was $1.71 at the pump.  Its now pretty clear that most of the 85% (E85) alcohol now sold at the pump in the United States is “splash blended” Brazilian style by the drivers.  In other words all those SUV gasoline drivers are buying half a tank of regular and half a tank of alcohol to save money.

With this in mind, some states are now installing blender pumps that will allow people to choose what mix of alcohol and gasoline they want to put in their car. The oil companies are desperate to keep this information sequestered.  The EPA debate over the modest upgrade to 15% is absurd since millions of Americans already are running on higher percentage blends and gloriously passing their smog tests with shockingly low emissions.   The reality is that every day more people have discovered that their cars run just great on 50% alcohol and are choosing to save both money and the environment by voting with their fuel budget.

Why is the EPA’s six-month delay potentially devastating to America’s quest for energy independence and a clean tech economic future?  The delay is a central part of a strategy started two years ago by Big Oil to crush the alcohol fuel movement.  In interviews, articles and news releases over the last few months, I have predicted that many alcohol plants that have been barely hanging on waiting for the expected 15% approval on December 1st will now go belly up.  The multibillion-dollar American Petroleum Institute (API) Food vs. Fuel anti-alcohol propaganda campaign has been stalled by the reality that far from there being any sort of grain shortage there have actually been record huge surpluses.  As I intimated earlier, how can there be a food shortage problem when we can’t even sell all we grow?  However, there has been a huge amount of damage done to alcohol’s reputation in the public’s mind as a result of this propaganda campaign.  This sets the stage for next year when most of the tiny federal incentives for alcohol fuel will expire without public support. Of course none of the oil incentives, nearly $6 per gallon of gasoline, have expiration dates.

Next year we can expect the oil companies to spend at least 5 billion dollars (4% of their profit) to convince America to abandon renewable fuel.  If E15 were approved, alcohol plants (and up to 500,000 people) would be back at full production and generating profit. The industry might be able to put up some sort of fight against Big Oil.  However, with the EPA-enforced alcohol plant lockdown for yet another six months, the industry is essentially as helpless as an ICU patient to stop an oil company roustabout from unplugging their life support. Of course it would be harder to demonize alcohol if the EPA had recognized alcohol this December as a pollution-fighting fuel.

With Big Oil getting all the subsidies and alcohol losing its trivial share, the entire independent fuel production industry faces certain bankruptcy. The oil companies will buy the plants out of bankruptcy court at pennies on the dollar. Valero bought up plants from the failed alcohol producer Verasun a few months ago. Once Big Oil owns the plants they will no longer have to share any alcohol revenue with farmers and can export all the money they make from alcohol and our tax dollars to foreign tax-free shelters. If farmers think that they have had a hard time dealing with selling crops to the grain giants like ConAgra and Cargill, they are in for a world of pain trying to deal with oil-owned distilleries that would just as soon buy their land as their corn.

Of all of the consequences of the EPA’s non-ruling, the thing I am probably the most angry and concerned about is the loss of the hundreds of thousands of direct and indirect jobs that could be created by the increase to 15%. Those jobs would make a huge difference to local economies all across rural America and for our nation as a whole.  At a time when the current administration is extolling the virtues of job creation and bringing work back home, the EPA steps up and puts a stopper in this vital market.

Along with employment opportunities lost, come additional farm failures. In December working farmers and their banks, who are right now planning next year’s crops, are figuring out what to grow based on best data for the coming year’s market demands. With the EPA blocking new demand for corn and grains and with the past year’s surpluses, planting very much corn in 2010 would be far too risky.  So corn futures prices may drop and for the first time in years we may actually have a shortage of corn next fall, for which we will have the EPA and Big Oil to blame (though as they have done in the past, they will say it is the fault of the alcohol fuel producers and farmers.)

It's time for President Obama to show America he cares about farmers, citizens, our economic future, and America’s ability to lead the global movement to truly renewable energy independence, and that he is ready to stop toxic fossil fuel use and the consequences of its related pollution. The president can execute an executive order increasing ethanol provisionally to 15% and have the EPA get to work on studying and approving a new 30% alcohol level in unmodified vehicles by June.  After all, we get 30% of our oil from the Middle East.  If we produced that much alcohol fuel and began looking at alcohol fuel as a solution for home and office heating and energy generation as well, we would have true homeland security. We would have all of the food, fuel, energy, and jobs we need now and well into our future. If we don’t need Mideast oil, it would be hard to imagine a reason for our sons and daughters to be there to defend our access to it.

Right now it all hinges on a single number, 15%, in a single set of antiquated regulations.  We need to shine light into the shadows in which the oil companies are hiding an alcohol solution to so many problems.  They have proven over and over it is their bottom line they care about, not the people of this country.  That’s why we depend on our government to protect us against the predation of giant corporate entities.  When the government joins with business to suppress solutions to our nation’s problems, it requires all of us to illuminate and shame our representatives into taking the action that would benefit this country.

Author David Blume has been employed by NASA andMother Earth News Eco Village. He is the founder of American Homegrown Fuel Co. Inc., an educational organization teaching farmers how to produce and use low-cost alcohol fuel at home. Planetary Movers Inc., another award-winning Blume-founded project, became the transportation infrastructure for the Peace and Environmental Movement in Nicaragua. He has sat on the board of Ecosites International, Vivamos Mejor, and the Committee for Sustainable Agriculture. Blume has also been the executive director of Hidden Villa Farm and Wilderness Preserve. Currently he consults on projects for the Government of Ghana in alternative fuels, training the country's agricultural extension agents in organic farming and designing an ecological strategy to stop the advance of the Sahara Desert into the country. He and his staff have begun work on establishing a biofuels station in Santa Cruz, offering alcohol fuel. In addition, David Blume has worked with the Ford Motor Company in demonstrating alcohol fuel powered vehicles at a series of events in the U.S. He is the author of Alcohol Can Be a Gas!: Fueling an Ethanol Revolution for the 21st Century.

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