Wednesday, April 11, 2012
How A Dumb Law Blocks A Great Way To Fuel America
This year American motorists will burn through 14 billion gallons of ethanol, the end product of 5 billion bushels of corn—a third of the U.S. crop—grown on 33 million acres of farmland. It arguably cuts pollution coming out of U.S. tailpipes, but at a huge cost. Since 2005, when Congress required that ethanol be added to your gas tank, U.S. corn prices have tripled.
Steven Sterin thinks he has a better way. As president of the advanced fuels division at Dallas-based chemicals company Celanese, he’s supervising construction of two new plants—one in Texas, the other in China—to make ethanol. But you won’t see any vats fermenting corn here. Celanese makes its ethanol by tearing apart and recombining the hydrocarbons found in plentiful natural gas or coal. “We have the best gas-to-liquids and coal-to-liquids technology in the world,” he says. If it works, what Sterin is building will revolutionize the fuel industry. But that’s a very big if.
The problem isn’t science. It’s Washington. Thanks to the 2007 Renewable Fuel Standard law, gasoline refiners are mandated to blend so much plant-based or renewable ethanol into the gas supply that it prevents Celanese or any other fossil-fuel-based ethanols from even competing for the market. Though the RFS caps the blending of corn ethanol at 15 billion gallons a year, it calls for total biofuels blending to grow to 36 billion gallons a year by 2022.
Cellulosic ethanol is supposed to make up most of the difference. Maybe you recall President George W. Bush’s 2006 State of the Union address, in which he declared his goal that cellulosic ethanol made from “wood chips and stalks or switchgrass” would be “practical and competitive within six years.” RFS mandated 100 million gallons of cellulosic for 2010, 250 million for 2011 and 500 million this year.
But that hasn’t happened, even though the feds under both Bush and Barack Obama pumped $1.5 billion in grants and loan guarantees into upstart cellulosic producers. Most, like Range Fuels, Cello Energy and E3 BioFuels, have ended up bankrupt. Survivors like Abengoa Bioenergy produced fewer than 6 million gallons last year.
Amazingly, gasoline refiners are still on the hook. For failing to blend into their mix the mandated quantities of a fuel that does not exist, the refiners have gotten a $10 million bill from the Environmental Protection Agency to pay for their so-called waiver credits. They’re appealing.
Full article: http://www.forbes.co … f-it-werent-illegal/
