By Tim Rudnicki, Esq
The carbohydrate economy, or the biofuel vision, has been in the works for more than 100 years. At present, the most significant manifestation of that biofuel vision is expressed in the Renewable Fuel Standard (RFS) and Minnesota’s Petroleum Replacement Statute (PRS). For those of us concerned about the future of biofuels and the role they can play in boosting our energy security, creating economic prosperity, helping consumers and reducing greenhouse gas (GHG) emissions, it is especially important that we take our right and responsibility to vote one step further. We need to diligently seek out candidates for elected office who really do understand and support biofuels, then we should vote for those candidates and once they are in office we need to hold them accountable for their actions that either hinder or help biofuels.
We've come this far. Let's not backslide. Most of you probably realize that the first Flex-Fuel Vehicle was the Model T which was introduced by Henry Ford in 1908. The Model T was designed to run on gasoline as well as ethanol. Although gasoline was the dominant fuel at that time because it cost about a third less than ethanol, gasoline prices rose significantly near the end of World War I. Those price increases for petroleum gasoline sparked a healthy debate about the role of biofuels as explained in “The Quest” by Daniel Yergin.
According to Yergin, some leading thinkers in the early 20th century were considering the advantages of biofuels over petroleum and a couple of prominent scientists had this to say about biofuels:
"(...alcohol is) a wonderfully clean-burning fuel… that can be produced from farm crops, agricultural waste and even garbage." - Alexander Graham Bell
"(alcohol fuel is) the most direct route which we know for converting energy from its source, the sun, to a material that is suitable for use as fuel." - Scientist for General Motors.
And biofuels did indeed get a boost in the marketplace.
Just as ethanol was on the rebound, the 18th Amendment to the Constitution took effect and alcoholic beverages were prohibited. This prohibition reached into the fuel sector as critics claimed that "To force the use of alcohol in motor fuel would be to make every filling station and gasoline pump a potential speakeasy." It was only after the 21st Amendment repealed Prohibition, and when the Great Depression took a toll on farmers and commodity prices, that ethanol became a key component in farm relief and within the fuel supply. By the late 1930s, "Agroblends" - a mixture of gasoline and alcohol - were sold across the Midwest.
But the success of ethanol in the Midwest and other parts of the United States was short-lived as evidenced by a series of events over the following 66 years. Shortly after World War II, ethanol, once again, fell out of favor. But by the 1970s the United States was dealing with the adverse economic hardship caused by the oil shocks. Subsequent energy policies served to once again encourage the development of ethanol facilities.
Unfortunately, when oil prices collapsed in the mid-1980s, ethanol, once again, faded away. This type of whipsaw effect was due, in part, to the absence of a comprehensive renewable energy policy and inaccurate and incomplete economic cues regarding the externalities associated with petroleum. The runaway petroleum industry, with all the overt and hidden subsidies, had taken a toll on the economy, energy security, the environment and consumers.
It was only in 2005, with the introduction of the RFS and the PRS, that policymakers demonstrated an understanding about the complex interplay between energy policy, the agricultural sector, consumers, the economy, energy security and the environment.
While it might seem farfetched to expect that 100 years of neglect and damage to biofuels could be reversed in 10 years, the RFS and PRS are doing just that. These laws, while not fully implemented yet, are helping to deliver many positive benefits to people across Minnesota and the Nation.
Due to the RFS and PRS, Minnesota has seen some dramatic improvements and tangible benefits on a number of fronts. As for energy security, Minnesota ethanol producers are displacing at least 1.1 billion gallons of finite, carbon intensive, petroleum. Although Minnesotans have yet to maximize use of all the biofuels produced within the state, current biofuel production levels are approximately one half of the total motor fuel consumed annually in Minnesota.
As for economic benefits, Minnesota-based biofuel producers annually are injecting approximately $11.7 billion dollars into the economy as we grow our liquid transportation fuel. Rather than sending our energy dollars out of Minnesota to purchase and import finite petroleum, energy dollars used to purchase homegrown renewable energy are dollars that go to Main Street Minnesota.
Consumers receive economic benefits directly at the fuel dispenser. The more visible benefit is in, for example, the difference in price between non-oxygenated gasoline versus regular unleaded gasoline (E10 which consists of gasoline at 90% and ethanol at 10%) versus E15 which ranges from 10 cents a gallon to 20 cents per gallon less than regular gasoline. While less obvious, an equally important economic benefit is the role ethanol plays in offsetting the demand for petroleum. Several comprehensive studies have found that the supply of ethanol at the wholesale and retail levels helps to suppress demand for, and therefore the price of, gasoline by up to $1.69 per gallon in the Midwest.
Biofuels, such as ethanol, provide energy security, economic and consumer benefits as well as a broad range of environmental benefits. For example, according to scientific findings and reports compiled by the Renewable Fuels Association, ethanol contains 35% oxygen which, when added to petroleum gasoline, promotes more complete combustion and thereby reduces harmful tailpipe emissions. Further, while ethanol displaces the use of toxic gasoline components such as benzene - a carcinogen - ethanol also decreases GHG emissions. In 2013 alone, the amount of ethanol produced in the United States reduced GHG emissions from on-road vehicles by 38 million metric tons which is equivalent to removing 8 million cars from the road.
But we’ve only just begun. The RFS and PRS have laid the foundation for a more durable and sustainable energy future. For nearly 100 years we have been beholden to petroleum, including all the risks that come from putting all of one’s proverbial energy eggs in one finite fossil fuel basket. Finally, thanks to the RFS and PRS, we have at least another seven and ten years respectively to more fully grow, use and realize the full scope of benefits from renewable biofuels.
As you prepare to vote on Nov 4, if you value the benefits of biofuels and want to keep moving forward rather than getting caught in the past biofuel whipsaw, take some time to do a bit of homework and put the tough questions to the incumbents and their challengers. Examine past votes the candidates might have taken on energy policy matters. Ask whether a candidate supports the RFS and the PRS. Determine what, specifically, the candidates have done, or propose to do, to advance the production and use of renewable biofuels? If a candidate states they support the RFS and the PRS and generally like biofuels yet they call for keeping E10 as the status quo, ask them to explain their position until you have a clear understanding of where they really stand regarding biofuels. Finally, after you have weighed the evidence and made your decision, be sure to cast your vote.