Producer Angling for Higher Ethanol Blends

By Kate Galbraith
BlendsA “blender pump” in Britton, S.D., offers five blends of ethanol: E10, E20, E30, E40 and E85. Ethanol producers would like to see more of this. (Photo: American Coalition for Ethanol)

Squeezed by falling prices, credit woes and the volatile cost of corn, the ethanol industry has hit a rough patch lately. But Jeff Broin, the chief executive of Poet, the country’s largest ethanol producer with 26 plants across the upper Midwest, said that business was solid when I spoke with him on Wednesday.

“Poet is well-capitalized today,” he said, noting that in the past 60 days the company has opened three new plants, in Indiana and Ohio. Poet – which is privately held — is “looking for opportunities,” he added.

Mr. Broin would not specify whether that meant he might be interested in potentially buying plants belonging to VeraSun, a large ethanol producer that recently filed for bankruptcy protection. Another producer, Pacific Ethanol, saw its share price plunge this week after it announced troubling quarterly results.

Mr. Broin also underlined a key priority of the ethanol industry as a new administration takes office: a push for higher ethanol limits in cars, which currently are allowed to use fuel that contains up to 10 percent ethanol — unless they are flex-fuel vehicles, which are designed to handle any blend.

The 10 percent cap, said Mr. Broin, “is not a free market.”

The Renewable Fuels Association, an ethanol industry group, has suggested a 15 percent cap, as have others. But could the engines installed in the conventional car fleet handle the uptick?

“From an engine/vehicle performance point of view, there are no ‘show stoppers’ in going from 10 to 15 percent in a modern vehicle,” said Gregory Shaver, an assistant professor of mechanical engineering at Purdue University, in an e-mail message. He noted, however, “Ethanol is less energy-dense than gasoline, so I would expect a very modest reduction in the miles per gallon.”

Brett Smith of the Center for Automotive Research was somewhat more circumspect. “Current vehicles could be capable of running E15,” he said in an e-mail message, referring to a 15 percent ethanol-gasoline blend. “According to my sources, E20 would be pushing it, and may require ethanol-capable equipment.”

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Capt. Concernicus November 13, 2008 · 2:49 pm

I don’t believe that Ethanol should have ever been a viable alternative. There were never enough stations selling it, the performance of the cars were decreased, it pushed food prices up because it competed with human consumption and cars got less miles per gallon than gasoline engines.

So I’m not surprised to see some ethanol producing companies file for bankruptcy. I’m sad to see it happen because it wasn’t entirely their fault. The gov’t haphazardly put an energy policy together when they should have been thinking more long term and putting together a more comprehensive / thoughtful policy.

Hybrids, diesel-hybrids, diesel, hydraulic-hybrids (for commercial vehicles). That’s where the money should have been going as well as wind / wave and solar projects.

What I fear is that with gas prices in the low $2’s and high $1’s that the funding to these projects will be cut off or sharply decreased. This lull of low gas prices is just the calm before the storm. I don’t want to be the person who thinks it’s now affordable to buy a big truck or SUV because of low gas prices (minus the people who actually NEED a big vehicle). Their false sense of security and lack of long term vision will kill them (as it has the U.S.)when gas moves into higher priced territory.

I’m not a believer in slapping on outrageous gas taxes. I absolutely think that it’s the wrong thing to do. People need to learn how to conserve, car pool and take mass transportation when at all possible. It’s going to take time for hybrids (like the aforementioned) to become more common on the road and it’ll take time for all those hulking pick-ups and SUV’s (the ones that aren’t really needed by people) to get off the road when you figure the average vehicle lifespan is between 11-13 years.

Okay. That’s my speech for today. Now I just wait for the critics. Hahaha… =)

Paul November 13, 2008 · 3:58 pm

I run 50% ethanol in my Jeep Cherokee. I just wish I had a blender pump instead of running from the E-85 pump to the unleaded pump all the time.
Ethanol is a viable alternative.
Oil companies have a stranglehold on fuel distribution through owning the retail outlets. Do you really think a BP store wants to sell non BP products?
The food or fuel argument is oil company propaganda. 87% of all corn grown in the USA is fed to cattle. By refining the corn to ethanol you extract the sugar and starch (undigestable by cattle) out of the corn and leave the fats and protein as distillers grain, which a cow can actually digest. Increase in food prices came from an increase in fuel costs (fertilizer & pesticides produced by burning natural gas, use of diesel in tractors, diesel in the over the road trucks for delivery and the 20% increase of profits for the food corporations.
Wind Power is great, but plug in hybrids that use coal and nuclear power are at least produced locally, but have huge issues themselves (they eventually run out).
Live close to work, bike when you can and reduce your consumption.

Paul November 13, 2008 · 5:03 pm

actually increases performance, (cleans out engine from gasoline based hydrocarbon deposits). Higher octane. Ethanol is a better motor fuel than gasoline based on combustion properties.

steve March 11, 2009 · 11:04 am

Paul is absolutely correct, Ethanol is a better performing fuel all the way around. If car co’s would produce a e85 only car and increase compression ratios (turbo) they can completely eliminate the less mpg arument altogether, I do it on my personal vehicle and it performs flawlessly…Steve