Senate Democrats confirm that an extension of the full 45 cents/gal tax credit and 54 cents/gal import duty has been included in the Senate version of a Bush Tax Credit extension, prompting an angry response from the Brazilian sugar cane ethanol lobby. With Brazilian subsidies set to drop by nine cents per gallon, the Brazilian Sugarcane Industry Association (UNICA) claims that the American subsidy is no longer an “offset” but a full-fledged barrier to trade. UNICA’s President Marcos Jank tells brighterenergy.com

It is clear that the United States is not committed to open and fair trade in clean energy, particularly ethanol. We will have exhausted all options to resolve our differences through informal dialogue and the U.S. legislative process. It will then be time for the WTO to resolve this matter in accordance with applicable international rights and obligations.

Previously it was reported that the ethanol Blender’s Credit would be extended at a lower rate of 36 cents/gal, but with the tax credit extension debate snowballing into a lame duck slugfest, it seems that the subsidy extension was included to bring farm-state legislators on board. In addition to pissing off the Brazilians and possibly sparking a WTO battle, a full five-year extension of ethanol subsidies and tariffs at the current rate will cost the government no less than $31b. But don’t start planting corn yet… House Democrats seem set on scuppering the Senate’s tax credit extension deal (even though they support the ethanol extension). If they keep anything from passing during the lame duck session, the subsidies will expire completely, forcing the industry to champion new legislation. The battle rages on…

The ethanol industry might have enjoyed a small popularity bump when NASCAR switched to E15 (15% ethnol blend) gas, but it’s facing one of its biggest tests yet, as the so-called “blender’s credit” draws within a month of its expiration date. And the signs aren’t looking good for the most important subsidy in the ethanol playbook. Bloomberg reports that 17 Senators from both parties are pushing to end the 45 cent-per-gallon tax credit for ethanol blenders (and 54 cent-per-gallon import duty), and they’re opposed by only 13 Senators openly pushing for renewal. Plus, they’ve got a pretty strong argument:

If the current subsidy is extended for five years, the Federal Treasury would pay oil companies at least $31 billion to use 69 billion gallons of corn ethanol that the Federal Renewable Fuels Standard already requires them to use. We cannot afford to pay industry for following the law

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It is not a good policy to have these massive subsidies for first generation ethanol. First generation ethanol I think was a mistake. The energy conversion ratios are at best very small… One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president

Al Gore reveals [via MSNBC] that politics, not science, made an ethanol believer out of him. More than anything else, the admission underlines how badly ethanol can lose the war of ideas and still be heavily subsidized without fear of political attack. After all, what Presidential hopeful (read:every member of Congress) wants to shut down the biggest pork trough in Iowa, a state that just happens to be the first primary of the race for the White House? Heck, Al Gore probably had to lose his favorite weedwhacker to ethanol gum before he came out against the stuff. But just because your representative won’t vote against ethanol, doesn’t mean you can’t… surf over to pure-gas.org for a list of ethanol-free gas pumps near you.

We’ve been tracking mounting opposition to E15 ethanol for some time now, and when the EPA approved the 15-percent corn juice blend for vehicles made in 2007 or later, we saw the opposition begin to crystalize. Now, the Detroit News reports that a number of oil, food and other interest groups have filed suit in a D.C. Circuit appeals court, seeking to halt the EPA’s approval of E15. According to the DetN

The petitioners argue that under the Clean Air Act, the EPA administrator may only grant a waiver for a new fuel additive if it “will not cause or contribute to a failure of any emission control device or system.”

They believe the “EPA has unlawfully interpreted the statute to achieve a particular outcome,” but EPA administrator Lisa Jackson said it was based on “sound science.”

Considering the approval was apparently based on study results from a mere 14 vehicles, it sounds like the industry groups might have a solid point here. Especially when you realize that a major motivation for E15 approval is from the fact that blenders couldn’t sell enough E10 to meet government mandates. As the video above (from June of this year) proves, the political tail has wagged the scientific dog on ethanol ever since the farm lobby realized that ethanol could be the next corn syrup. With any luck, this lawsuit could just be the point at which science re-asserts itself.

NPR reports that

Tyson developed a diesel fuel made from chicken fat and food grease. It’s opening a plant Monday in Louisiana that can turn out 75 million gallons of the fatty fuel a year.

At the same time, they’re calling the federal government’s subsidies on ethanol… well, chicken.

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At least one of the institutions financing ads damning Democratic candidates this election season wants to put ethanol in your gas tank. The American Future Fund was founded by one Bruce Rastetter, the CEO of Hawkeye Energy Holdings, one of the larger ethanol companies in the US, according to an article in the New York Times. The fund is financing ads aimed at Democrats in key positions to influence booze fuel… so is the problem their “liberal” policies, or the fact that they’re insufficiently supportive of the farm lobby’s beloved corn juice?

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Bloomberg reports that the Environmental Protection Agency has approved blends of up to 15 percent ethanol in gasoline for cars produced since 2007, handing a victory to pro-ethanol groups like Growth Energy. The EPA had previously capped gas-ethanol blending at 10 percent (E10), on fears that the higher percentage of corn-based ethanol could damage engines. But the approval of E15 hasn’t exactly made those fears go away. According to Credit Suisse analyst Robert Moskow

The approval of E-15 by the EPA won’t have a positive effect on [ethanol giant Archer Daniels Midland] in the near-term. Blenders remain reluctant to implement E-15 because it requires a separate pump and because the EPA has not absolved the blenders of potential legal liability from consumers.

And it’s not just blenders who are up in arms at the decision. Gas refiner Valero Energy, the American Automobile Association and the Detroit automakers (which had previously been pro-ethanol) are all against the increase to E15 in “normal gas.” All of which means E15 isn’t likely to show up at your neighorhood gas pump anytime soon.

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The EU has ambitious CO2 targets: Less than 130g/km by 2012, less than 95g/km by 2020. Carmakers are shaking their heads: No way! Even the most electro-agnostic firms tinker with EVs (even if they are from Japan) to bring their average down. “No problem,” says a new study. The targets are a cinch to reach. What’s more, no heavy and expensive batteries to lug around. use the existing engine! No range anxiety. What is that miracle technology? Read More >

What will be the fuel of the future for cars? Gasoline? Diesel? Ethanol? Electric? Hydrogen? I might as well ask “What are the numbers for next week’s lottery?” No-one really knows; which is why everyone is hedging their bets. To invest in a particular technology and ignore the rest is basically playing Russian roulette. (There you you. We forgot  CNG.) This next evolution of the car industry is going to be critical. While Ford is looking at other types of alternative propulsion, at the moment it is pretty much playing it safe, sticking to more efficient ICE’s, hybrids and electric cars. Very good bets to make. But now, it seems, Ford is playing it a little riskier. Read More >

Gasoline with up to ten percent ethanol have been approved for public sale in the US, and the ethanol industry has been pushing to increase the maximum allowed blend to 15 percent. Or 12 percent until the EPA can figure out if E15 damages engines. But with automakers turning against the e15 push, fears about E10-related engine damage (which primarily began with boat and small engine operators) are being more widely heard. So why is E10 allowed if it damages engines? For one thing, trailerboats.com points out that

Yamaha warns that due to the fungible nature of fuels in transit from refinery to service station, some E10 fuels may actually get an extra dose of ethanol

In other words, E10 may be safe but you may not actually be getting E10. But more importantly, the market is answering the call of consumers. Over at pure-gas.org, a site dedicated to connecting Americans with stations offering ethanol-free gasoline, the number of registered “pure gas” pumps has skyrocketed since June of last year. But, warns the site’s founder (a BMW motorcycle enthusiast),

We buy [ethanol-free gas] because we want to fuel our vehicles with it. If you want to save money on gas, this site is of no use to you – it will NOT have gasoline prices on it. They vary from day to day and this site isn’t about saving money. It’s about finding pure gasoline for your machine.

So we’re wondering: does ethanol-free gas exist near you, and if so, is it more expensive? Finally, is there a price premium you would be willing to pay for ethanol-free gas? Or would you even pick corn-free gas (and its groundwater-accumulating carcinogen MTBE) at price parity with E10?

Opposition to the Ethanol industry’s push to allow gasoline blends with up to 15 percent ethanol is coming together this week, as a massive coalition of interest groups calls for congressional hearings on the EPA’s pending E15 decision [via PRNewswire]. The Alliance of Automobile Manufacturers and Association of International Automobile Manufacturers joined 37 other groups, ranging from the National Resources Defense Council to the Outdoor Power Equipment and Engine Service Association, in calling on congressional energy committees to take up the issue.

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No, it’s not a Mel Gibson joke… Scientists at Edinburgh Napier University have developed a formula for making butanol biofuel out of byproducts of the Scottish whiskey industry, reports Sky News. Apparently researchers

combined so-called pot ale – the liquid from the copper stills distillery equipment – and the spent grains used to make whisky, also known as draff

to create Butanol, an ethanol-like biofuel. Unlike the corn juice, however, Butanol can run in any gas-powered engine and does not degrade components over time.
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Since corn-based ethanol began coming under attack for a wide variety of negative environmental and social impacts, the renewable fuels industry has sought to cover the sins of its corn juice gravy train with a coat of “advanced biofuel” greenwash. Accordingly, the ethanol blending mandate (from the 2007 Energy Independence and Security Act (EISA)) has included requirements for cellulosic and non-corn-derived biofuels which the industry says will replace corn… eventually. Unfortunately it seems that “eventually” is going to take longer than was expected, as the EPA has already slashed the 2010 mandate for advanced biofuel blending from 100m gallons to 6.5m gallons. And today the EPA announced rules for the 2011 advanced biofuel blending goal, and once again the non-corn fuels are getting the short end of the stick.
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America’s ethanol producers were some of the few Americans optimistic or cynical enough to find a bright side to the BP Gulf spill. Ethanol’s lobbyists-in-chief, GrowthEnergy, decided it would be real cute to run ads highlighting all the bad things ethanol hadn’t done. One of which is not “Ethanol has never harmed the Gulf of Mexico,” by the way. As the ad parody above points out though, even if the ethanol was creating a dead zone in the Gulf of Mexico for years before the BP spill, there are quite a few other things ethanol hasn’t done. Like this, just in from the AP [via Google]: convince the EPA to buy into its shameful, manipulative PR line and rush a decision on increasing blending limits.
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Slate‘s Robert Bryce reckons so. With ethanol producers and blenders bouncing off the ethanol “blend wall” and into bankruptcy court, Bryce figures

Now the industry is counting on a president beleaguered by the made-for-TV crisis in the Gulf of Mexico to help it out. And he appears ready to do just that. On April 28, six days after the Deepwater Horizon rig sank, President Obama visited an ethanol plant in Missouri and declared that “there shouldn’t be any doubt that renewable, homegrown fuels are a key part of our strategy for a clean-energy future.” Obama also said, “I didn’t just discover the merits of biofuels like ethanol when I first hopped on the campaign bus.”

The strongest indication that an ethanol bailout is imminent came last Friday when Agriculture Secretary Tom Vilsack (former governor of Iowa, the nation’s biggest ethanol-producing state) said, “I’m very confident that we’re going to see an increase in the blend rate.”

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