This guy watched PUMP, got mad, and went looking for E85

Glenn Peterson watched PUMP the Movie on iTunes recently. And frankly, it made him angry. Which can be a good thing, if you take that anger and turn it into something constructive.

The part of the film that motivated Glenn to do his small part to end our oil addiction was when Jason Bateman, in that soothing voice of his, mentions that you can look on the Internet to find fueling stations that sell ethanol blends. As it happened, Glenn already owned a flex-fuel vehicle, a 2011 Chrysler Town & Country. Like 17 million other FFVs on the road in the U.S., it was made to run on E85.

Glenn went on E85Prices.com and found a Propel Fuels station about 10 miles from his home in San Diego that sells E85 (a blend that’s actually between 51 percent and 83 percent ethanol, the rest traditional gasoline).

“It was $3.06,” Glenn said, noting that regular 87-octane gas, E10, was selling for about 20 percent more. “So I filled up then, and anytime I thought of it afterwards, I would go there. It’s a little out of the way, but not that far out of the way.

“If a bunch of people do a bunch of small things, it’s like one big thing. And unfortunately … I talk to people at where I work about E85, and it’s just amazing, the misconceptions. I work with a lot of really smart computer people … it’s like they’ve got that part of their mind closed. And I don’t get it.”

Glenn, 54, bought the van in 2012, and a few months later he drove his family to his hometown of Minot, N.D., on vacation. He already knew about FFVs and E85, but even though he was on the lookout for stations that sold the fuel, he couldn’t find any. On the trip back, they pulled off I-80 in Rock Springs, Wyo., and spotted an E85 sign at a Kum & Go station.

“My wife took a picture of me fueling up. I was just so happy I finally found it!” Glenn said.

But his wife drove the van more than he did, and it was just more convenient to fill up at Costco whenever she went shopping there. Then came PUMP, and now the Petersons are an E85 family.

So what got him so angry watching it?

“I was just so mad at [Standard Oil baron John D.] Rockefeller for everything he did, to basically get us into the mess we are now. But I’ll also admit the government and … we basically let that happen to us. So we are as addicted to oil as we can be.

“And oh by the way, I called Costco. I talked the guy who runs their gas program and asked him why they didn’t have E85. He didn’t think there would be a demand. And I’m like, ‘Well, you’re mistaken, sir.”

That reminds us, Glenn: After you’re done watching PUMP and ready to get involved, one of our projects is to convince as many independent fueling retailers (the ones who aren’t obliged to sell a particular oil company’s gasoline) as possible to offer alternative fuels to their customers.

Sign our petition asking them to do just that. And keep sharing your stories about high gas prices and solutions with us! You can also join the conversation on Fuel Freedom’s Facebook page and on Twitter.

Gal Luft: Can the American energy revolution survive a deal with Iran?

Undoubtedly in the event of lifting of the sanctions, cash-starved Iran would do all in its power to quickly ramp up its oil exports to make up for lost revenues, and the oil market could face an injection of 500,000-800,000 barrels/day of Iranian crude. At a time when U.S. crude oil supplies are already at their highest level in more than 80 years and storage facilities are reaching their maximum capacity, an influx of Iranian oil could easily slice current oil prices by half.

Fake and real news: Links between GHG reduction and alternative fuels

FT-emissions-graphicTurn on your local news every night and you’ll need a sleeping pill to get some rest. The format and content is the same around the country: a lot of tragic crime — ranging from sexual harassment, robbery and shootings — for about ten minutes; local sports for about 5 minutes; what seems like ten minutes of intermittent advertising; silly banter between two or more anchors for two minutes; and a human-interest story to supposedly lighten up your day at the very end of the show — likely about a dog and cat who have learned to dance together or a two-year-old child who already knows how to play Mozart. You get the picture!

Local news, as presently structured, is not about to send you to sleep feeling good about humanity, never mind your community or nation. National news is really only marginally better. Again, the first ten minutes, more often than not, are about environmental disasters in the nation or the world — hurricanes, volcanoes, cyclones and tornadoes. The second ten minutes includes maybe one or two tragically laced stories, more often than not, about fleeing refugees, suicide bombings, dope and dopes and conflict. Finally, at the end of the program, for less than a minute or two, there is generally a positive portrayal of a 95-year-old marathon runner or a self-made millionaire who is now single-handedly funding vaccinations for kids in Transylvania after inventing a three-wheeled car that will never need refueling and can seat twenty-five people.

Maybe this is how the world is! We certainly need to think about the problems and dangers faced by our communities, the nation and its citizens. Every now and then, Americans complain about the media’s emphasis on bad news. But their complaints are rarely recorded precisely in surveys of viewership. We criticize the primary emphasis on bad news, but seem to watch it more than good news. Somewhat like football, we know it causes emotional and physical injuries to players, but support it with the highest TV ratings and attendance numbers.

Jimmy Fallon, responding to the visible (but likely surface) cry for more good news, has added a section to The Tonight Show. He delivers fake, humorous news, which is, at times, an antidote to typical TV or cable news shows. Perhaps John Oliver, a rising comedian on HBO, does it even better. He takes real, serious news about human and institutional behavior that hurts the commonweal and makes us laugh. In the process, we gain insight.

This week’s news about carbon dioxide emissions “stalling” in 2014 for the first time in 40 years appeared in most newspapers (I am a newspaper junkie) led by The New York Times and the Financial Times. It seemed like good news! Heck, while the numbers don’t reflect a decline in carbon emissions, neither do they illustrate an increase. Let’s be thankful for what we got over a two-year period (in the words of scientists — stability, or 32.3bn tons a year).

But don’t submit the carbon stability numbers to Jimmy Fallon just yet. It’s much too early for a proposed new segment on The Tonight Show called “Real as Opposed to Fake, Good News.” Too much hype could convince supporters of efforts to slow down climate change that real progress is being made. We don’t know yet. Recent numbers only reflect no carbon growth from the previous year over a 12-month period. The numbers might be only temporary. They shouldnt lessen the pressure to define a meaningful fair and efficient strategy to lower GHG. If this occurs, yesterday’s good news will become a real policy and environmental problem for the U.S. and the world for many, many tomorrows.

I am concerned that the stability shown in the carbon figures may be related to factors that might be short lived. Economists and the media have attributed the 2014 plateau to decreases in the rate of growth of China’s energy consumption and new government policies, as well as regulations on economic growth in many nations (e.g., requirements for more energy-efficient buildings and the production of more fuel-efficient vehicles), the growth of the renewable energy sector and a shift to natural gas by utilities.

Truth be told, no one appears to have completed a solid factor analysis just yet. We don’t really know whether what occurred is the beginning of a continuous GHG emission slowdown and a possible important annual decrease.

Many expert commentators hailed the IEA’s finding, including its soon-to-be new director, Dr. Fatih Birol. He indicated that this is “a very welcome surprise…for the first time, greenhouse gas emissions are decoupling from economic growth.”

Yet, most expert commentators suggest we should be careful. They noted that the data, while positive, is insufficient to put all our money on a bet concerning future trends. For example, Hal Harvey, head of Energy Innovation, indicated, “one year does not a trend make.”

Many articles responding to the publication of the “carbon stall” story, either implicitly or explicitly, suggested that to sustain stability and move toward a significant downward trend requires a national, comprehensive strategy that includes the transportation sector. It accounts for approximately 17 percent of all emissions, probably higher, since other categories such as energy use, agriculture and land use have murky boundaries with respect to content. Indeed, a growing number of respected environmental leaders and policy analysts now include vehicle emissions as well as emissions from gasoline production and distribution as a “must lower” part of a needed comprehensive national, state and local set of emission reduction initiatives, particularly,if the nation is to meet temperature targets. Further, there is an admission that is becoming almost pervasive: that renewable fuels and renewable fuel powered vehicles, while supported by most of us, are not yet ready for prime time.

While ethanol, methanol and biofuels are not without criticism as fuels, they and other alternative fuels are better than gasoline with respect to emissions. For example, the GREET Model used by the federal government indicates that ethanol (E85) emits 22.4 percent less GHG emissions (grams per mile) when compared to gasoline (E10). The calculation is based on life-cycle data. Other independent studies show similar results, some a higher, others a lower percent in reductions. But the important point is that there is increased awareness that alternative fuels can play a role in the effort to tamp down GHG.

So why, at times, are some environmentalists and advocates of alternative fuels at loggerheads. I suspect that it relates to the difference between perfectibility and perfection. Apart from those in the oil industry who have a profit at stake in oil and welcome their almost-monopoly status concerning retail sales of gasoline, those who fear alternatives fuels point to the fact that they still generate GHG emissions and the assumption, that, if they become competitive, there will be less investment in research and development of renewables. Yes! Alternative fuels are not 100 percent free of emissions. No! Investment in renewables will remain significant, assuming that the American history of innovation and investment in transportation is a precursor of the future.

Putting America on the path to significant emission reduction demands a strong coalition between environmentalists and alternative fuel advocates. Commitments need to be made by public, private and nonprofit sectors to work together to implement a realistic comprehensive fuel policy; one that views alternative fuels as a transitional and replacement fuel for vehicles and that encompasses both alternative fuels and renewables. Two side of the same policy and behavior coin. President Franklin Roosevelt, speaking about the travails of the depression, once said, “All we have to fear is fear itself.” His words fit supporters of both alternative fuels and renewables. Let’s make love, not war!

Now is not the time to end oil export ban

Eleven oil company executives under the guise of their new lobbying group, Producers for American Crude Oil Exports, just met with the White House to urge the ban’s repeal, claiming that increased oil production can serve as the foundation of a new American economy, with unfettered oil exports creating even more jobs … If you think this sounds too good to be true, you’re right.

Ethanol has outgrown the Renewable Fuel Standard

Everybody knows that investing in ethanol right now is a bad bet. The logic is simple: The national average price for a gallon of regular gasoline was $2.45 on Thursday, down about 30 percent from this time last year. Ethanol prices have dropped as well.

On top of that, you have the uncertainty of whether the EPA will ever issue a Renewable Fuel Standard for 2014, let alone 2015. Marin Katusa, chief energy investment strategist for Casey Research, is warning investors:

[Warren] Buffett would tell you, if you asked him, that an investor should absolutely avoid the ethanol market in the current market. Why? Because of his two rules:
1. Don’t lose money.
2. Don’t forget rule #1.

Yet if the ethanol effort is about to run out of gas, how do you account for stories like this:

Ethanol industry pretax profit estimated at $7.8 B for 2014 (Ethanol Producer magazine)

The U.S. ethanol industry came off its best streak of profitability in January, one that ran 95 consecutive weeks without a loss for the model Iowa plant used to estimate and track industry profitability. … University of Illinois economist Scott Irwin presented his analysis of ethanol profitability in a recent FarmDocDaily post, “2014 really was an amazing year for ethanol.”

Ethanol plant stays profitable in challenging times (Farm and Ranch Guide)

Changing over from powering Red Trail Energy LLC with coal to using natural gas is a major step forward for this ethanol plant in southwestern North Dakota. With the changeover from coal to natural gas in March, the plant will be able to produce more ethanol, according to Gerald Bachmeier, CEO of Red Trail Energy LLC. … “We’re excited about the change and the opportunity to reduce our carbon footprint,” he said.

Pacific Ethanol reports 2014 was a record year (Ethanol Producer)

Pacific Ethanol Inc. has released 2014 financial results, reporting record net sales, gross profit, operating income, adjusted EBITDA and gallons sold. Neil Koehler, CEO of Pacific Ethanol, called 2014 a pivotal year and stressed that the company met and exceeded all of its goals for 2014. Shares of Pacific Ethanol were up 23.4 percent at $11.51 Thursday afternoon.

Something is going on in the ethanol industry that commentators haven’t quite grasped. I would put it this way: The industry has matured to the point where it doesn’t much matter how much ethanol the government says we have to consume. The industry has outgrown the Renewable Fuel Standard.

Here’s another headline that indicates what’s going on:

Louis Dreyfus ships big U.S. ethanol cargo to Middle East traders (Reuters)

Louis Dreyfus Commodities has shipped a large cargo of U.S. ethanol worth $17 million to the Middle East traders said, stoking hopes among U.S. producers of renewed appetite from some buyers overseas. Dreyfus, one of the world’s largest commodities merchants and a major ethanol player, is sending 280,000 barrels of ethanol from the Port of New York to Jebel Ali in the United Arab Emirates, where it will be blended into gasoline for Iraq, according to four traders familiar with the move.

This followed on a February 27 report that Dreyfus had also shipped 3.56 million gallons by tanker to Brazil, which is the world’s leading consumer of biofuel.

“Consumption was surprisingly high last year and now mills must refill inventories,” Mauricio Muruci, an analyst with Porto Alegre, Brazil-based research firm Safras & Mercado, told Bloomberg. Brazilian ethanol demand jumped 15 percent to 5.41 billion gallons last year, the highest level since 2010, data from Sao Paulo-based sugarcane group Unica show. Ethanol, produced from corn in the U.S. and sugarcane in Brazil, is used as a transportation fuel undiluted or in a blend of 25 percent of the biofuel and 75 percent gasoline in the Latin American country.

So American ethanol is filling gas tanks in Iraq. It is replenishing inventories in Brazil, which uses more ethanol than any other country. Is there any doubt that there is a world market for this product?

The opening of world markets comes just at the time when the impracticality of the Renewable Fuel Standard is becoming too difficult to ignore. Senators Diane Feinstein (Democrat of California) and Pat Toomey (Republican of Pennsylvania), a kind of east-west alliance, have introduced a bill ending the Renewable Fuel Standard altogether.

This past weekend at the annual Iowa Ag Summit, a passel of Republican presidential hopefuls addressed the ethanol issue, and none of them was very enthusiastic. This contrasted starkly with the usual kowtowing to Iowa farm interests that characterizes the run-up to the Iowa caucuses, the first official event of the primary season. In 2012, both Newt Gingrich and Mitt Romney, who had publicly opposed ethanol subsidies, buckled under pressure and supported ethanol. That may not happen this time around. With several candidates opposing the RFS — and with Iowa mattering less and less to Republican Presidential hopefuls — the group may get up the courage to defy the state on the issue.

And the question must be asked: “Does it really matter?” Corn-bred ethanol seems to be doing very well despite the falling price of gas. And there is this report out of the University of Illinois:

A recent study simulated a side-by-side comparison of the yields and costs of producing ethanol using miscanthus, switchgrass, and corn stover. The fast-growing energy grass miscanthus was the clear winner. Models predict that miscanthus will have higher yield and profit, particularly when grown in poor-quality soil. It also outperformed corn stover and switchgrass in its ability to reduce greenhouse gas emissions.

It’s obvious the industry is still maturing. Iowa farmers may be much better off growing miscanthus on marginal land while sticking to their normal rotation of corn and soybeans. And as long as there are cars on the road, there will always be a market to buy it.

[Disclosure: On the basis of research for a previous Fuel Freedom article, the author recently purchased a small holding of Pacific Ethanol stock. So far he is happy with the investment.]

Oil-price drop cuts tax revenues in highest-producing states

Texas, North Dakota, Alaska, and Oklahoma are four of the five top oil- and natural gas-producing states, and they derive a significant share of their unrestricted operating revenues from taxes on oil and natural gas production. Although California produces more oil than both Alaska and Oklahoma, its economy is much larger, making it relatively less affected by changes in oil and natural gas prices and production.