Biofuel Backers: Protect RFS

NASCAR's Richard Childress Among Those Championing Higher Ethanol Blends

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
Connect with Chris:
From left to right, NASCAR team owner Richard Childress, DuPont Executive Jan Koninckx and Brooke Coleman of the Advanced Ethanol Council testify Tuesday before the Senate Agriculture Committee on advanced biofuels. (DTN photo by Chris Clayton)

WASHINGTON (DTN) -- Former stock-car driver and current NASCAR team owner Richard Childress explained to senators Tuesday that NASCAR race cars perform well with 15% ethanol fuel blends and could even run at 30% blends without problems.

Childress and other supporters of advanced biofuels testified Tuesday before the Senate Agriculture Committee about the need for Congress and the Obama administration to stick with the Renewable Fuels Standard levels for advanced and cellulosic biofuels. Biofuels are staring at proposals by the Environmental Protection Agency to lower the renewable fuel volumes for 2014. At the same time, petroleum companies continue litigation, arguing that the RFS volumes remain too high and must be cut even more by EPA.

Childress, who serves on the board of Growth Energy, said switching to 15% ethanol blends in NASCAR vehicles "has gone fantastic and has been a very welcomed switch throughout NASCAR." He said race cars have been tested up to 30% blends with no problems.

"I think expanding and growing our use of biofuels is a key component to helping farmers make a living while at the same time delivering environmental benefits that can be enjoyed by all Americans," Childress said. "I think what NASCAR has done to show the performance side of ethanol is key."

EPA proposed reducing the RFS for 2014 because of a lack of production in advanced biofuels and cellulosic ethanol, coupled with the lack of infrastructure to push higher blends of corn-based ethanol. EPA's proposal, which could become final later this spring, would set the 2014 blend requirements for all renewable fuels at 15.2 billion gallons, a reduction of 3 billion gallons from the standard set in the RFS. Petroleum companies would have to use 2.2 billion gallons of advanced fuels, which is scaled back from 3.75 billion that had been mandated under the RFS. The proposal reduces cellulosic ethanol projections from 1.7 billion gallons down to 17 million.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., said for the biofuels industry to grow, the right policies must continue to support it. She questioned why ethanol blends remain impeded from moving to 15% when Brazil easily blends 30% of its gasoline with ethanol. "In fact, they have lower gas prices because of the higher blends. Meanwhile, here in the United States, ethanol makes up 10% of our fuel supply," she said.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Childress noted NASCAR racing puts fuel through some of the most rugged testing regimes possible. He noted if the country went to 15% blends nationally, it would create 136,000 jobs and reduce greenhouse gas emissions. Childress said he would like to see ethanol blends go even higher.

"I wish we were here today talking about how we were all running E30 in our cars," Childress said.

Lawmakers who support ethanol have complained that EPA used older data on gasoline demand when creating its proposed rule. EPA Administrator Gina McCarthy told reporters on Monday that the agency is using more current information and that will cause EPA to adjust its renewable-fuel targets in the final rule.

Brooke Coleman, executive director of the Advanced Ethanol Council, told lawmakers the U.S. is No. 1 in advanced biofuels development and investment. Bills in Congress to reduce the RFS only hurt the second-generation fuel because 90% of the new mandated fuels must come from sources other than corn-based ethanol. He said the EPA proposal has damaged financing for projects that were underway. The petroleum industry isn't trying to stop the handful of plants expected to commercialize cellulosic ethanol this year, but stop the three dozen or so cellulosic projects in different stages of planning now.

"What the EPA proposal did, first with the leaked proposal in October then in November, was froze everything," Coleman said of the investment community.

Jan Koninckx, global business director for refineries at DuPont, cited the company's 30-million-gallon-a-year facility near Nevada, Iowa, that could start processing corn stover later this year to produce cellulosic ethanol. The company has been working with farmers to create a new supply chain from corn residue, as well as work with USDA's conservation programs to keep a percentage of residue on the ground to cover the soil. Koninckx called 2014 a "watershed in our history as an industry" for making cellulosic ethanol a commercial technology.

"The bottom line here is that, driven by the RFS, we have completely re-imagined how we fuel our planet," Koninckx said. "We do so with renewable resources without adding any additional CO2 into the atmosphere. That is a remarkable achievement."

Cellulosic ethanol will be more expensive than corn-based ethanol at first, but costs will come down over time. Koninckx said cellulosic ethanol will be competitive with oil at $80 a barrel.

DuPont also is working with BP on a joint venture to produce an advanced biofuel called biobutanol that has higher energy density than ethanol and can be shipped in conventional pipelines. Butanol gasoline also can be used in the summer in parts of the country that require waivers from air-quality regulations. DuPont anticipates the butanol fuel could be produced as a commercial fuel as early as next year.

Nancy Young, vice president of environmental affairs at Airlines for America, told senators that the airline industry is very interested in seeing more advanced biofuels developed for jets. Airlines are not part of the RFS, but the industry still could create a significant market. With jet fuel representing one-third of an airline's operating expenses, prices and price volatility have tremendous impacts. Young noted U.S. airlines used 5 billion fewer gallons in 2013 than 2000, but spent $34 billion more for fuel.

"A stable, domestic supply of renewable jet fuel would create a competitor," she said. Young added, "A vibrant alternative jet fuel industry would create jobs while agriculture would have more access to markets."

Chris Clayton can be reached at chris.clayton@dtn.com

Follow Chris Clayton on Twitter @ChrisClaytonDTN

(AG/CZ)

P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[article-box] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Chris Clayton