Congress set out to make major progress in reducing the United States’ dependence on oil, and the latest energy bill was meant to be a step in the right direction. Indeed, through the addition of the Renewable Fuels Standard (RFS), the beefed-up “Energy Independence and Security Act” should significantly boost the nation’s consumption of ethanol. According to the American Coalition for Ethanol (ACE), the RFS calls for at least 36 billion gallons of ethanol to be used nationwide by 2022, as well as a minimum of 9 billion gallons of ethanol to be used nationwide by 2008. 

“The president’s signature on this Renewable Fuels Standard signals the beginning of the end of our nation’s addiction to oil,” Brian Jennings, executive vice president of ACE, said in a statement. “This national commitment to accelerate the use of biofuels and improve the fuel economy may be the most profoundly important step ever taken by the United States in support of energy security.”

Perhaps the most significant aspect of this new energy bill, which was signed into law in December, is its focus on new biofuels. According to Ron Lamberty, vice president of marketing for ACE, the RFS gives producers of ethanol a manageable timetable with attainable milestones for production, but also allows time to develop commercial-scale plants for ethanol from feedstocks other than corn.

“The new bill focuses on future biofuels and making more fuels out of things other than corn,” Lamberty adds. “It is stuff that is still renewable [and] that is a lot more plentiful to replace a higher percentage of the gasoline market. Now we can work toward being more independent when it comes to our fuel supply.”

RFS will encourage commercialization from cellulosic feedstocks such as native grasses, crop residues, forestry waste and other materials from all regions of the country. Lamberty also says RFS will help determine other needs of cellulosic ethanol, such as how to transport, how to store and how to process. “The technological gains on that side will be large,” Lamberty adds. “We have got to have large commercialization faster than with what happened with corn.”

In order for cellulosic ethanol to take hold, Lamberty explains, the market must react faster than it did to corn ethanol. Lamberty says corn ethanol stayed in the 1 billion-gallon range for about 20 years and didn’t realize its full potential until markets opened up.

Once that happened, the corn ethanol business grew rapidly over the next seven years. So far, numerous companies in various sectors are getting involved with the push for cellulosic ethanol.

“Because of the challenge in the marketing of ethanol, the first thing we have to do in order to move along is make sure there will be a market for the fuel when it is created,” Lamberty says. “The certainty of the market is the first thing to establish. If we take a chance on this technology, the chances are good once we get the fuel made we’ll be able to sell it.”

Restriction-Free
The RFS schedule will also guarantee that ethanol will comprise more than 10 percent of the nation’s fuel supply by 2012, raising the likelihood that blends of ethanol other than the widely available E10 and E85 will be for sale to consumers.

However, a major holdup is the restrictions oil companies put in place to make it difficult for station owners to carry ethanol products. These concern what owners can sell and where they can keep pumps. However, Lamberty says this energy bill takes that power away from refiners, giving station owners the ability to carry whatever fuel they would like.

“That is a pretty subtle thing, but it’s helped people,” says Lamberty, who owned a station himself before joining ACE. “Those who own stations and want to sell ethanol are being allowed to put more ethanol in their stations.”

Instead of turning to a new technology to take advantage of this new law, Lamberty says the industry is turning to an old solution. Stations are returning to blender pumps, which pull various amounts of fuel from each grade to create various mid-grades.

In this case, station owners are blending E10 and E85 to create mid-grade ethanol blends. ACE cites studies that have shown the mid-level blends provide better mileage and improved air emissions than gasoline, even in vehicles not designed for that fuel, according to Lamberty.

To help bring consumers greater access to ethanol-blended fuels, ACE says it has worked to establish a new program in HR 6 providing retailers incentives to convert existing equipment or purchase and install neew infrsatructure to dispense blends such as E20, E30 and E85. ACE says this auhorizes a $200 million program in fiscal 2008 through 2014 to install blender pumps.

“We are grateful Congress had the vision to include this innovative program in the energy bill,” Jennings adds.