Gas Price Relief -- Now

By Stephen Dake -

Ronald H. Miller, 2012
Prisma Advisors, LLC., www.prisma-advisors-llc.com



With gasoline prices soaring to $4 and $5 per gallon, it is good to know that relief is available now, but only if the President will act.  His "all of the above" strategy has merit.  New oil and gas production is not the answer, but it is part of the solution.  The Keystone Pipeline is not the answer, but it is part of the solution.  Wind and solar the same.  And biofuels - to date ethanol has made the only significant renewable contribution to energy security and a better economy.  We now enjoy nearly a million barrels a day of clean, renewable ethanol production at the expense of those who hate America..  What's more, the U.S. Navy is not required to escort this sustainable energy source to our gasoline stations.

Today ethanol costs $0.90 per gallon less than gasoline and it's not taxpayer subsidized like oil and gas.  That means an E10 blend is $0.09 per gallon cheaper than straight gasoline, and it has a higher octane performance rating.  We have a growing surplus of ethanol in this country because of the artificial 10% blend limitation.  ADM, the nation's largest ethanol producer, just announced the closure of its North Dakota facility, a victim of swelling supplies.  Unfortunately that sends the wrong signal of more energy dependence to say nothing of the devastating effect on the local rural economy.

Languishing at USEPA is a request to allow 15% blends of ethanol in the market place.  Immediate implementation would reduce gasoline costs by nearly a nickel a gallon.  Every little bit helps!  EPA has approved E15 for 2001 and newer vehicles and recent health effects testing showed ethanol as a big winner.  However this bifurcation of the market is a barrier to gasoline stations moving toward the higher blends.  They must have products that everyone can use.  EPA hasn't disapproved E15 use in older cars - they just have yet to complete their testing protocols.  Other independent testing has concluded older vehicles run fine on 15% ethanol.  Mr. President, it is time to move the bureaucracy forward and bring E15 to market now in order to save cash strapped consumers money and further blunt the influence of those who would harm us.

In the next decade we will likely move to 25% ethanol blends just as Brazil has been doing for the last 40 years.  There are many new exciting, sustainable feedstocks including cellulose, drought-resistant energy crops grown on marginal land and trash which can be diverted from landfills into useful energy products.  These technologies are on the cusp and need a ready market.  Consumers need relief now.  E15 approval is a win-win.  "All of the above" will be judged this election season by acts and not just words.  The time to act is now!

Ronald H. Miller is Managing Director and co-founder of Prisma Advisors, LLC a management advisory firm specializing in advanced biofuels.  Mr. Miller has over four decades of energy experience, including CEO of a Fortune 1000 producer of biofuels and food products from agriculture.
Location: Pekin, IL, USA

Comments

Post a Comment

Popular posts from this blog

In Defense of Trash

By Stephen Dake -
This week, in a rare show of bipartisanship, the U.S. Senate voted 62-37 to back military aviation biofuels. This means the "Green Hornet" will continue to fly despite objections from fossil fuel supporters. The Department of Defense consumes 4.6 billion gallons of fuel per year making it the largest single consumer of energy in America. With operations stretched all over the globe, the Air Force and Navy consume about 85% of that total combined. Therefore the DoD has a strategic interest in fuel diversity and security, especially in times of crisis. The United States generates about 250 million tons of Municipal Solid Waste each year of which about a third is recovered through recycling programs, etc. Another 13% is combusted for energy recovery, leaving about 135 million tons going to landfills each year. There is sufficient organic material in that MSW to generate well over 5 billion gallons of biobutanol (jet fuel) - more than required to meet the military...
Read more

LEST WE FORGET....

By Stephen Dake -
by Ronald H. Miller The other day I was talking to a friend when I mentioned the Oil Embargoes of the 1970's. She was 7 years old in 1973 and has little remembrance of the long gas lines or the "odd" and "even" license plate days just to qualify getting into those long lines. It dawned on me that the post-Boomer generations have no real idea as to the trauma that is inflicted when our oil supply is shut off. As we watch the current events unfold in the Middle East, we must wonder whether possible regime change will take us back to those tumultuous days of four decades ago. Could it even be worse? From a dependency standpoint things are worse. In the 1970's we imported about 30% of our oil, today it is around 60%. Things would be even worse if it were not for 10% of the gasoline barrel now being provided by domestic biofuels. That's about one million barrels a day of secure domestic production not subject to regime change. It is also $100 mill...
Read more

The Rest of the Story....

By Stephen Dake -
The Rest of the Story.... by Ronald H. Miller As a young boy growing up in mid-century Kansas I remember Paul Harvey on the radio with "The Rest of the Story...". When it comes to renewable ethanol and the "food vs. fuel" debate it is time for "the rest of the story". USA Today, no fan of ethanol, noted in its March 18 article, "Hunger, despair for millions" that "The farm value of food - what goes to the farmer - is about 19% of the cost in the U.S., according to the U.S Department of Agriculture. The rest goes to labor, packaging, transportation, energy and corporate profits." USA Today goes on to take a swipe at corn demand for ethanol causing higher farm prices but clearly by their own admission 81% of the cost of food comes from beyond the farm. Given the great recession, labor costs have barely nudged but packaging and transportation costs are functions of energy costs. The average cost of crude oil in 2009 was $53.48 pe...
Read more