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To paraphrase Valero Energy Company CEO Bill Klesse: Enough already on federal ethanol blend mandates!

Klesse has joined efforts with Big Oil colleagues to push back on the US Environmental Protection Agency's (EPA) efforts to bring E15 – a blend of 15 percent ethanol and 85 percent gasoline – to gas pumps across the country. Klesse recently sent a letter to the EPA asking for an immediate waiver to the ethanol mandate rules so that oil refiners do not have to blend more ethanol into the gasoline they're producing or buy biofuel credits. Those mandates are, "causing a very unfair wholesale and retail market, picking winners and causing losers, based on existing assets and luck," Klesse wrote in a letter to the EPA.

Valero is the nation's largest independent oil refiner, and is also the third largest ethanol producer. The company owns 10 ethanol plants and produces 1.1 million gallons of corn ethanol each year. Even so, Klesse has been lobbying the federal government to drop the ethanol mandate and says refiners can't afford to meet the renewable energy standards. Valero isn't the only oil company that is unhappy about buying Renewable Identification Number (RIN) credits or producing more ethanol to make E15. It's little surprise that Big OIl's fight with the ethanol industry continues, even when one company is participating in both sides.

Even US Senators are getting involved with the biofuel RIN credit debate. According to Reuters, Michigan Senator Debbie Stabenow (D) and Charles Grassley (R-IA) are both asking for more information from the Commodity Futures Trading Commission and the EPA, respectively. That was before the US federal government was shut down (including many EPA workers), so who knows when we may get some answers.


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  • 19 Comments
      Marcopolo
      • 6 Months Ago
      There comes a time when even the most ardent supporters of any failed "noble experiment" have to admit reality, and move on ! Just like Prohibition, the US corn-based ethanol industry has long since proved far more economically and environmentally harmful, than beneficial. Unfortunately, unlike Prohibition, the US ethanol industry has powerful lobbyists and die-hard supporters who just can't admit the truth. Remove the Government imposed mandate, and the US corn-based ethanol industry will disappear. (Just like " Prohibition ") With the distraction of failed products like ethanol removed, genuinely environmental and economic beneficial alternatives to fossil fuels can advance more rapidly. Remove the mandate !
      Marcopolo
      • 6 Months Ago
      The US corn based ethanol industry, will not go down without a fight ! Despite that the entire US ethanol industry has proved to be a complete economic disaster, and a shocking tragedy to the environment both inside the US and world wide, A combination of Big Agri and the US farm state lobby are fighting a desperate rear guard action to maintain the mandate. But the writing is on the wall for this disastrous industry ! Eventually, the mandate must be abandoned, and the industry will wither and die.
      Vlad
      • 6 Months Ago
      Corn Ethanol is doing nothing for the environment, and hurting food prices more than it is helping gas prices. It takes a lot to get me to side with oil companies - but when it comes to ethanol, it's cellulosic or nothing.
        raktmn
        • 6 Months Ago
        @Vlad
        If corn prices are hurting food prices so much, why aren't food prices down 45% like corn prices are down off of their 2012 high? Higher fuel prices, higher minimum wages, higher transportation prices, and higher profit margins for the food industry have more to do with higher food prices than ethanol production. It is a red herring.
          Vlad
          • 6 Months Ago
          @raktmn
          Rise in corn prices have lead to immediate and easily traceable increases in food prices. The less your corn is processed, the more you feel it - that's why Third World suffered the most. As for prices not falling - yes, they are sticky like that. They go up much easier than down.
        raktmn
        • 6 Months Ago
        @Vlad
        If it weren't for corn ethanol, there would be zero market for a single drop of cellulosic ethanol. Both are required as part of an "All of the Above" solution to get us off of reliance on oil, especially foreign oil. This is just like EV's are super awesome, but having lots new EV's doesn't change the emissions of all the gas cars still on the road and still being built. So we need an "All of the Above" solution like ethanol for those vehicles. Picking and choosing just your favorite technology isn't a valid solution.
        EZEE
        • 6 Months Ago
        @Vlad
        I somewhat agree with what you said, however corn prices are currently trading at three year lows.
          Vlad
          • 6 Months Ago
          @EZEE
          ..mostly because we experienced crazy high highs, with prices more than tripling between 2000 and 2008.
          Michael
          • 6 Months Ago
          @EZEE
          Vlad, Speculators in the market pushed corn prices artificially high because they kept hearing how the ethanol mandate would rob from the food supply. It was all a smokescreen. The US grows so much corn that we have no choice but to turn it into multiple products. The US creates so much HFCS for export because they grow way more corn than they need for food or ethanol. The real ethanol hurdle lies in processing capacity and oil companies continuing the smoke screen.
          Michael
          • 6 Months Ago
          @EZEE
          Commodities futures traders have caught on to the smoke screen. There is no corn shortage being caused by ethanol production. The only thing holding down corn production, and still propping up the price, for food is the droughts ravaging the American continent.
      Michael
      • 6 Months Ago
      Valero makes crappy gas that consistently underperforms in regards to mpg versus it's competitors. Maybe they make ethanol, but they suck at blending it with gasoline.
      • 6 Months Ago
      Ethanol absorbs condensed water in a fuel tank or can during storage, and separates out of the gasoline. This causes a layer of corrosive water and ethanol to form at the bottom of the tank which wont burn, and reduced octane gasoline at the top. E10 is causing massive problems in small engines that are not run every day. Ethanol: good to drink; stupid to put in gasoline.
      Tyler Stager
      • 6 Months Ago
      Ethanol is a joke it takes twice the amount of ethanol to burn at the same btu as gasoline. So in actuality adding ethanol hurts gas economy. Not to mention ethanol eats away at fuel lines and fuel pumps in most cars. It also produces poisonous gases when burned but that is not regulated by the EPA.
        raktmn
        • 6 Months Ago
        @Tyler Stager
        All cars in the US have been built to be E10 compatible since 1985. If you have a car that is 30 years old or more, it is about time to change those fuel lines even if they've never seen a drop of E10. Gas and dry rot also destroy fuel lines. There were plenty of bad fuel lines long before there was E10. Fuel pumps and fuel lines on 1985 and newer cars are not harmed by E10, so I don't know what you mean by "most cars", since most cars on the road today were built after 1985. The biggest problem is running on pure gas, and getting lots of varnish and junk built up from the dirty gas, and then having the E10 clean it all out and you have to replace the fuel filter. I guess you would blame that on the fuel that cleaned up the junk, and not the fuel that created it in the first place...
      Charlie Peters
      • 6 Months Ago
      California Department of Motor Vehicles (DMV) flushes the motorist wallet using the water to grow GMO fuel to export the profits. It is ok because the fed EPA mandates ethanol and fines us for using what they mandate.
      brotherkenny4
      • 6 Months Ago
      We shall have tears for the wealthy Mr. Klesse when the oil companies lobby the feds to stay out of foreign wars that have only the purpose of stabilizing a certain industries costs and profits.
        EZEE
        • 6 Months Ago
        @brotherkenny4
        Mean-spirited hateful. Texas racist homophobic children starving all people mistreat blah blah blah blah blah
      • 6 Months Ago
      Key executive compensation, according to Morningstar went from $14,210,904 in 2008 to $37,991,293 in 2012, so how can Valero, or any other oil and gas company say they can't afford the ethanol standards. That's pure *&*))* on the part of their CEO's. We could also be importing sugar ethanol from Brazil, but the tariffs are so high, they can't bring it in. It also burns cleaner. I think we have to start connecting what these multinationals earn at the top and the taxes they don't pay, before Congress let's them off the hook on ethanol--and of course, how many Congress people are on the "payroll" of these same companies. It's all a ruse. Notice the Tesla story--of course it's terrible that the car caught on fire and they will have to make it safer--but if that was a gas engine that caught on fire, which also happens, it would never be in the propagandized news. My favorite film years ago was "Who Killed the Electric Car."
      • 6 Months Ago
      EPA isn't making "efforts to bring E15 to gas pumps" anywhere - they just tested it and approved it. That means YOU can use it if YOU want to. But you can't buy E15 if you want to, because oil companies have banned its sale in branded stations, and they're trying to ban it from everywhere so they never have to compete against it. Ethanol is a buck cheaper than gas and the oil companies are spending more money to get rid of it than it would cost them to buy every every ethanol plant in the country. Why would that be? Hmm . . . Valero makes a billion gallons of ethanol a year and 30 or 40 billion gallons of gas and diesel. Anyone who believes Valero is "participating in both sides" must be in Colorado or Washington, because they are high as hell.
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