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The seemingly never-ending argument over ethanol content in fuel is making headlines once again. This time 'round, the debate centers on New Hampshire. Recently, the state's House of Representatives voted to ban corn-based ethanol on the basis that the biofuel drives up gasoline prices. Soon, the fate of the bill (HB 374) will land in the New Hampshire Senate.

The Renewable Fuels Association (RFA) is none too pleased with New Hampshire's legislation. Bob Dineen, president and chief executive officer of RFA, wrote a letter to New Hampshire lawmakers calling for the rejection of HB 374. In abbreviated form, Dineen's letter reads:
On behalf of existing and future ethanol producers, I urge you to reject HB 374. This legislation would eliminate the only viable alternative to imported oil available to New Hampshire.

In supporting his bill, Representative David Campbell erroneously claimed that ethanol was responsible for driving gasoline prices higher. In today's gasoline market, pure gasoline is selling at a higher price than ethanol at the wholesale level. In fact, ethanol is the only alternative fuel that is putting any downward pressure on gasoline and oil prices.

Finally, there are serious questions relating to the legal authority of the state to undermine federal renewable energy policy and the Clean Air Act.

I humbly urge you to reject HB 374. Should such a provision pass and become law, it would force the price of gasoline for all New Hampshire drivers to rise.
Follow the jump to read Dineen's letter in its entirety and you can click here (PDF) to view New Hampshire's HB 374.

[Source: Renewable Fuels Association | Image: fishhawk – C.C. License 2.0]
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RFA Urges New Hampshire to Reject Ethanol Ban

The New Hampshire House of Representatives recently voted to ban corn-based ethanol in the state. As this bill has now been sent to the Senate to be voted on, Renewable Fuels Association (RFA) President and CEO Bob Dinneen wrote a letter urging the New Hampshire lawmakers to reject HB 374.

Dear Senator:

On behalf of existing and future ethanol producers, I urge you to reject HB 374. This legislation would eliminate the only viable alternative to imported oil available to New Hampshire motorists and is premised on misinformation about the role of ethanol in the fuel market.

In supporting his bill, Representative David Campbell erroneously claimed that ethanol was responsible for driving gasoline prices higher. In today's gasoline market, pure gasoline is selling at a higher price than ethanol at the wholesale level. As of March 24, wholesale gasoline in New Hampshire was selling for $3.09 per gallon. By comparison, ethanol at the wholesale level was selling for $2.55 per gallon. That is an immediate $0.54 savings for gasoline marketers. Importantly, that is before marketers claim the $0.45 per gallon federal tax credit for using ethanol. All told, that is $0.99 savings for marketers. Therefore, when these marketers blend gasoline with 10 percent ethanol (E10) as is the common blend found in New Hampshire, drivers are saving nearly a dime on each gallon of E10 they use.

In fact, ethanol is the only alternative fuel that is putting any downward pressure on gasoline and oil prices. At 10 percent of the nation's gasoline supply, ethanol is backing out demand for imported oil and mitigating some of the economic damage oil prices perpetually over $100 per barrel wreak on the U.S. economy and the budgets of American households. In 2010 alone, the more than 13 billion gallons of ethanol produced and used in the U.S. reduced our appetite for imported oil by 445 million barrels valued at $34 billion, according to a study by Cardno ENTRIX economist John Urbanchuk.

Also troubling is the insistence that the state ban just corn-based ethanol. While I strongly support the enthusiasm and desire to commercialize new ethanol technologies, banning existing ethanol production would eliminate the very market into which advanced and cellulosic ethanol producers will one day want to sell. Developing ethanol technologies that use the abundance of biomass available in the Northeast requires that existing ethanol technologies and markets be successful. HB 374 would seek to undermine that success.

Finally, there are serious questions relating to the legal authority of the state to undermine federal renewable energy policy and the Clean Air Act.

For nearly 30 years, ethanol-blended fuel has been safely and effectively used in all engine platforms across the nation. It has helped America begin a transition to a more self-sufficient energy future by increasingly reducing our dependence on imported oil. As oil prices continue to rise, the role of domestically-produced renewable fuels like ethanol becomes even more important.

I humbly urge you to reject HB 374. Should such a provision pass and become law, it would force the price of gasoline for all New Hampshire drivers to rise during a time of already volatile fuel prices for everything from gasoline to heating oil.

Should you have further questions or need more information on the American ethanol industry, please feel free to contact the Renewable Fuels Association at 202.289.3835 or on the web at www.EthanolRFA.org.

Sincerely,

Bob Dinneen, President and CEO
Renewable Fuels Association


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  • 44 Comments
      • 4 Years Ago
      Did you know that about 80% of the nitrogen in chemical fertilizer (made from natural gas, btw) runs off the fields in the first rain, and goes into the water supply? (In the ground, it and the pesticides, kill off much of the natural live-sustaining processes that make new, nutrient rich soil!) It then causes algae blooms, which cause excess oxygen, which kills all the animal life, and then the algea dies and rots causing a complete dead zone -- much of the Gulf of Mexico is dead.

      But wait, there's MORE bad results from our chemical farming: the nitrogen combines with oxygen, forming nitrous oxide -- which is a major greenhouse gas, and this is responsible for a large portion of global climate change.

      Do you think that ethanol is a energy gain or loss?

      Neil
        • 4 Years Ago
        You can make the same alarmist claims about all modern efficient agriculture, and thus consign mankind to starvation.

        And nobody serious claims ethanol is a net energy loss. Even harsh critics admit that it has a 1.5 to 1 energy gain - they just dismiss that as inadequate.

        The REAL relevant metric is NOT energy in vs. energy out, it's petroleum in vs. ethanol out, and for that the figure is around ten and even twenty units of ethanol per expended petroleum. (Science, 2006).
        • 4 Years Ago
        It is that bad -- we are also pumping the fossil water aquifers lower and lower. We have had to abandon lands, and wells are going dry; despite drilling deeper and deeper. We are losing the evolutionary battle against the bugs and weeds, too.

        But we *can* feed ourselves! What worked for about 20,000 years -- enriching the dirt with natural processes; rather than mining it. We farmed sustainably for all that time, and we have somehow convinced ourselves that chemicals and genetically engineered crops was better -- it is NOT! Monocultures are dumb.

        To quote my favorite farmer poet, Wendell Berry:

        "Once plants and animals were raised together on the same farm - which therefore neither produced unmanageable surpluses of manure, to be wasted and to pollute the water supply, nor depended on such quantities of commercial fertilizer. The genius of America farm experts is very well demonstrated here: they can take a solution and divide it neatly into two problems."

        Sincerely, Neil
        • 4 Years Ago
        Methane digestion allows energy to harvested AND the nitrogen in the leftovers is *fixed* -- in other words, it is not water soluble and will not wash away in the first rain.

        We are part of the natural processes of the entire earth -- we cannot remove ourselves from the way things work; without causing a lot of damage. With chemical fertilizers and pesticides, we are royally messing things up.

        Neil
        • 4 Years Ago
        Mark,

        Please stop talking about no growth. It shows how little you understand about economics and how swiftly you embrace self-imposed-hell out of ignorance. Economics is not a physical science so all of these "educated" scientists who keep talking about the impossibility of growth due to energy balances or thermodynamics might as well say that love or knowledge must necessarily retract. They need to stick to their own discipline b/c when they wander into unknown territory they make some obscenely stupid remarks about economics. Don't regurgitate their idiocy. Intentionally killing all economic growth is about as wise and as progressive as killing a neighbor you cannot get along with. You are a criminal.
        • 4 Years Ago
        Mark - without getting into the economics of the thing - there are plenty of violations of thermodynamics around:

        http://www.livescience.com/3426-hope-controversial-cold-fusion-power-source.html

        Indicating that our knowledge of the universe is rather... sparse.
        • 4 Years Ago
        The other thing is that cellulosic based ethanol using "waste" stems and stalks etc. takes even more biomass from the land which really should be left there to decompose and enrich the otherwise impoverished soil. Thus, another reason why ethanol requires even more chemical petroleum based fertilizers.

        "You can make the same alarmist claims about all modern efficient agriculture, and thus consign mankind to starvation."

        Hence, the reason why economic growth must stop and we must switch gear to invest in sustainable agriculture and energy production, not feed the ponzi scheme. Also, BTW, when modern agriculture depends on and depletes groundwater, fossil fuels, deforestation, and pesticides, it is not accurate to call it "efficient". The only "efficiency" modern agriculture achieves is in minimizing the amount of jobs it creates.
        • 4 Years Ago
        "You can make the same alarmist claims about all modern efficient agriculture, and thus consign mankind to starvation."

        It's not a 'claim' when it's an observable, known fact. And when bio feed stocks from crops that grow fine outside of chemiculture work better than the ones dependent upon them, it becomes even more painful.

        When you know how intrinsically fused food production costs are with petroleum costs, chemiculture's change is as inevitable as the starvation that will accompany it.
        • 4 Years Ago
        Maybe we should stop feeding cattle starch rich corn feed which gets wasted because cattle can't digest starch efficiently.
        • 4 Years Ago
        mylexicon, I don't quite follow your reasoning. You are correct in that economics is not a physical science; in fact it is not a science at all since it follows nothing even remotely resembling the scientific method. However, economists like to flatter themselves by inventing academic sounding codewords and making nice pretty charts with lots of math and numbers. They construct these charts and theories based on their understanding of how the real physical world works, and then build upon this to make their models. However, the problem is that they don't have a clue about how the real world works, because they spend their time in the Faculty of Arts, generally shunning anything scientific. Therefore, if their understanding of how the real world works is fundamentally flawed and incomplete, it follows that their theories about how economies work amount to nothing more than fantastical hooey.

        Can you please explain to me the laws of thermodynamics. They describe the energy flows inherent in every process in the universe. Since our economies operate in the universe, they are therefore bounded by the laws of physics. Can you point me to some brilliant economist's discovery of a way to violate the laws of thermodynamics?

        Economic growth will either be killed intentionally by us now, or it will be forced upon us very soon by the laws of thermodynamics.
      • 4 Years Ago
      I have really seen a lot of arguments against ethanol fuel, but "it drives up gasoline prices" is by far the most idiotic one I've ever seen. Ok, it's NH, so their solution against high gas prices might be a bunch of F-16 ;)
        • 4 Years Ago
        The guy quoted in the article is saying that removing ethanol would lead to higher gas prices, and he is likely correct about that as it would require refineries to make separate fuel just for them.
        • 4 Years Ago
        Not only because of this but also just because the ethanol isn't much more expensive and will be cheaper very soon with futher raising oil price. From a pure price point people will have as much ethanol as possible to have in their fuel to keep the prices _low_...
      harlanx6
      • 4 Years Ago
      They will just sell it in Vermont.
      harlanx6
      • 4 Years Ago
      If farming is so bad, Niel, what do you propose to feed everyone. By the way, if NO is no way a major cause of climate change.
        • 6 Months Ago
        @harlanx6
        The Malthusians want us all to live, that is why they are screaming bloody murder, pointing out the sheer folly of our current economic system that is 110% guaranteed to crash catastrophically, in the very near future.
        harlanx6
        • 6 Months Ago
        @harlanx6
        The Malthusians would have been right, except they couldn't reason that technological advances would continually change man's ability to survive. It also has given man the ability to commit mass suicide. In the end there has to be a carrying capacity, so maybe they were right. It's just their timetable that was off. It demonstrates the folly of predicting the future.
        • 6 Months Ago
        @harlanx6
        Ine:

        You should be honest about the mandate you mention. It mandates 13billion gallons of conventional biofuel (Corn ethanol) this year, but caps at 15billion in 2013. The rest of the 36 billion gallons are mandates for biomass-based diesel, Cellulosic ethanol and advanced biofuels.
        harlanx6
        • 6 Months Ago
        @harlanx6
        I think world population will peak this century, but I cannot support that conclusion with facts. It's too many people. If we don't voluntarily control our population, mother nature will do it for us sooner or later. One of the things I see in the future is decentralization of power production. The sun is free, and we get plenty of it. Where several metropolises may now be fed with a huge electrical production facility, I see individuals, villages and neighborhoods electing to go off grid with their own power production using the sun. All vehicles will be using electricity or hydrogen produced from electricity all solar generated. It's better than carbon neutral, and it can be done now. We are just getting started. We have a future if politics doesn't keep getting in the way. I won't live to see it, but I have seen the start.
        • 6 Months Ago
        @harlanx6
        Let's just remember we're in a population explosion that hasn't ended.
        From 1776: 1 Billion people to today with 7.
        In 2035 we will have 9 Billion people.
        This is the growing Population Bubble.

        We are also in a Carbon Bubble: Wood-Coal-Oil.

        Both are going to Blow.

        We need sustainable solutions, because we can't produce dirty energy and pollute our species, along with thousands of others, into extinction.

        If we are using 40% of corn production to produce ethanol we are the stupidest species on the planet.
        • 6 Months Ago
        @harlanx6
        The Malthusians just want us all to die.
        • 6 Months Ago
        @harlanx6
        Of course people need to eat, but there is no sense in being destructive. There is some level of environmental impact in anything you do, but you should be trying to minimize environmental harm while fulfilling needs. Currently 40% of US corn production goes to ethanol (the largest portion), mandated at 13 Billion gallons per year. That mandate is scheduled to increase to 36 Billion gallons in 2022 (or more than what we can get from the entirety of current corn production). If we could eliminate current corn consumption for ethanol (much less future mandates), we could use less environmentally harmful farming practices (look at Germany) and reduce acreage cultivated. If we are using fewer acres for raising corn, more will be available for grazing, reducing the need for corn for animal feed (the second highest percentage of corn consumption in the US).

        http://www.bloomberg.com/news/2011-03-29/rising-corn-acreage-seen-failing-to-meet-increased-u-s-feed-ethanol-use.html
        • 6 Months Ago
        @harlanx6
        "In the end there has to be a carrying capacity, so maybe they were right. It's just their timetable that was off."
        _________

        These ecologists put numbers to it, see what they say at the bottom of their analysis. We have escaped the Malthusian collapse up until now through mechanized industrial agriculture with a heavy reliance on fossil fuels and groundwater, both of which are running out. Furthermore, due to the law of diminishing returns, we cannot expect any significant future gains in agricultural output per hectare.

        ------->

        "(d) Human "carrying capacity" on earth is hard to estimate, because it depends upon affluence of a population and the technology supporting that population. But at present levels of affluence and technology, a population 50 to 100% larger than we have today would push our use of terrestrial NPP to well over 50% of the available production, and the attending degradation of ecosystems on earth (e.g., air and water pollution) would be of major concern. Thus the limits to unchecked growth must be very near. Notice that the lower we "feed" on the trophic chain, the more efficient the web of life becomes -- eating animals that eat animals that eat plants is a very inefficient use of solar energy."

        http://www.globalchange.umich.edu/globalchange1/current/lectures/kling/energyflow/energyflow.html
        harlanx6
        • 6 Months Ago
        @harlanx6
        I agree Mike. nearly everything we are doing is unsustainable.
      asus
      • 3 Years Ago
      Ethanol at the 10% level destroys Engine's and fuel related parts, and this fuel does not burn cleanly as you may think, look behind any car or truck and look at the tail pipe you see Black soot in the tail pipes, this is unburnt Fuel, and this soot is pass through the entire part part of the emission control system of a car, causing engines to stall even Idle incorrectly, for older cars this can cause Jerking and stalling of the engine, and Damage the drive line system,, in short we need to rethink this fuel, its causes more damage then good.
      harlanx6
      • 4 Years Ago
      By the way, I am not a proponent of corn ethanol, but I am a proponent of properly managed biofuels.
      • 3 Years Ago
      Ethanol also lowers your millage. It has caused my van to run badly . In turn causeing me to push the gas harder to smooth out the engine. I have several cars that have started to run badly when this new summer blend of gas has come out with more ethanol. This stuff is bad in so many ways. GET RID OF IT !!!!!!
      • 4 Years Ago
      My solar PV system will cost about $.20/kWh based on a conservative 25 year life, and that represents prices almost 4 years ago. Should be lower today and going down. This power is also mostly being generated at peak demand times when energy costs are higher.
      • 4 Years Ago
      Producing biofuels from the sun is not the most efficient use of resources; its solar to electricity conversion efficiency is about 0.5%, compared with solar PV and solar concentrator efficiencies of 20% to 40%.
      The only role I can see for biofuels is in niche markets like aircraft where there are no alternatives.
      Any logical thinking on this subject is distorted by the influence of lobbyists and pressure groups looking for subsidies.
        • 4 Years Ago
        Oh, and my numbers are WITHOUT SUBSIDIES.
        • 4 Years Ago
        I was merely trying to point out that given finite (particularly agricultural) land area its better if you are going to use it to generate energy to put solar pv or concentrators on it rather than biofuels. If you assume 30% efficiency for a commercial solar compared with 0.5% for biofuels, you will need 60 times the land area taken up with biofuels to generate the same amount of energy!
        I am not sure where you got your cost figures for solar energy from but they seem a little high, maybe it’s a figure for domestic installation? Some suggest given the recent dramatic reduction in solar costs that it might be even cheaper than nuclear ( http://www.consumerenergyreport.com/2010/08/01/solar-energy-cheaper-than-nuclear-energy/).?
        And, if technology for printing solar panels ever works out it would be a good replacement for biofuels. http://www.nanosolar.com/technology - a far better use of our finite land area than biofuels.
        Outside specialist applications it seems to me biofuels are really just a way of subsidising farmers, clearly the whole setup is a bit of a mess, given farmers and others were encouraged to invest in the technology and now quite reasonably are unhappy that that investment may not payback.
        • 4 Years Ago
        I don't know where those cost comparisons come from, references would be nice, but you can get solar panels for less than $2 per Watt now. Say total installed costs are double that at $4 per Watt. That is $4000 per kW.

        Let's say they produce power on average 8 hours a day and they have a service life of 10 years, so that's $4000/8/365/10 = $0.13 per kW-hr, not 50 cents. And I made some conservative assumptions there too.
        • 4 Years Ago
        Your statistic is irrelevant in the real world.

        You imply that solar electric power is somehow more "efficient" than using ethanol, but of all electricity sources, solar's cost is in a league of its own. Going by typical real-world prices,

        2 cents per kilowatt hour is the cost for hydro-electric dam power.
        4¢/KW-hr for coal
        5¢/KW-hr for natural gas and nuclear
        6¢/KW-hr for oil, geothermal, and biomass, and
        7¢/KW-hr for wind.

        All by itself is solar, with a whopping 50 cents per kilowatt-hour.
        • 4 Years Ago
        First off, solar is now as cheap as nuclear, before Fukushima.
        What's the cost of Nuclear after Fukushima?

        Your prices price None of the Negative Externalities of your energy sources.
        This game isn't economics, it's fraud.

        Price in the negative externalities off your energy supplies and Solar, Wind and Geothermal are Far Cheaper.

      • 4 Years Ago
      Why isn't there a move to SwitchGrass?
        • 4 Years Ago
        Is it got to do with the massive size of the corn subsidy then?
        • 4 Years Ago
        Never underestimate the power of a subsidy or a tax break to distort the market value of a product.
        • 4 Years Ago
        Interesting question! Flex fuel cars don't care where the ethanol in their E85 comes from. "Gasoline only" cars don't care where the ethanol in their E10 or E15 comes from. So if switchgrass is as great as its enthusiasts claim, so energy efficient, with such high yields per acre, etc., why isn't it under-cutting corn ethanol in the marketplace?

        Switchgrass ethanol must cost a lot more per gallon than corn ethanol, or there must be problems with scaling up production to commercially serious levels.

        Maybe anti-corn obsessives should be less gullible about swallowing oil cartel-funded anti-corn FUD. However, I suspect that if switchgrass does pan out, and the predictable FUD campaign against -it- swings into gear, its advocates will, ahem, head for the tall grass. We'll hear all about how switchgrass is a laughable, unfashionable, outdated ethanol source, but of course some OTHER will-o-wisp that will surely be ready in 5 years is the Hot New Thing.

        As the oil cartel laughs, keeps pocketing our money, and spends it on lolling in luxury at our expense, crippling our economy, and funding terrorism.
      • 3 Years Ago
      Ethanol destroys engines, period, and now they want to up it to 15% which cannot be used in most everything, especially motorcycles, boats, snowmobiles, and on and on. What does this tell you. Consumers are stupid sheep and should look into this crap. If Ethanol wasn't paid for by you and I through the government, it would have never survived. It's another pile of crap that has grown into a monster and are about their own survival. Ethanol is worse for the environment because it takes more ethanol to get the same mileage as a pure gas car. Look this up people, your getting screwed, and now since the government isn't paying for the ethanol you will, and they are pushing to raise the amount of ethanol in gas as a way to drop the price of fuel, but they are trying to just dump their surplus off on us. Ethanol should be banned, it's a bad idea for the government to mandate and force crap on the people. It's also a bad idea because it ruins engines and actually is lowing fuel economy as well as ethanol is now being dumped here cheap from overseas.
      • 4 Years Ago
      The ethanol lobbyist is somewhat misleading. Remember that ethanol has 2/3 the energy density of gasoline. So $2.55/0.667= $3.82 per energy equivalent to a gallon... Not a big difference, but still more expensive.

      I don't think there should be a ban in New Hampshire, especially because the federal blending mandate would shift more ethanol into other states. I think consumers should be free to choose, as the environmental benefits are debateable. Labeling should be clear as to ethanol percentage and people selling mislabeled product should be prosecuted.
        • 4 Years Ago
        As kl said, nobody complains that premium 93 octane gasoline costs more than 87 octane.

        Add in not only the higher octane but the fact that ethanol does not need the carcinogenic and mutagenic additives used by gasoline as "detergents" to avoid gunking up your engine.

        Add in the fact that ethanol burns clean, with none of the soot that produces gray powder on all vehicles, black roadside snow, and smog that kills 40,000 Americans annually.

        Add in the fact that ethanol helps de-fund Mideast tyranny, extremism, and terror that causes wars. And that it helps free our economy from further oil crashes (as the old union slogan goes, the job you save may be your own).

        It becomes a pretty good deal.

        Finally, as kl alluded to, automakers are learning to close the mileage gap, as they work to make flex fuel vehicles ethanol optimized rather than merely ethanol tolerant. The new Buick Regal has narrowed it to as little as 4%.
        • 4 Years Ago
        The higher octane rating reduces this a bit, so you only need about 20% more on pure ethanol. Then things are starting to get interesting even without a further raising oil price.
        • 4 Years Ago
        The ban should be enacted nationally, not just New Hampshire.

        I only which California would ban Ethanol, followed by Texas.
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