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Wider variety of ethanol-blended fuels would help

By Staff | May 9, 2009

Ethanol has already proven itself as a major player in our country’s effort to become energy independent, and as an engine for economic development and job creation, especially in rural America. Much more, however, can be expected from this vital industry if action is taken to make a wider variety of ethanol-blended fuels available to the American public.

A major stumbling block to increased ethanol production and use is an outdated Environmental Protection Agency regulation limiting the amount of ethanol in a gasoline blend to just 10 percent for use in conventional engines. The regulation was adopted years ago, when it was believed that higher ethanol blends could not be used in most automotive engines. That is not the case today. Modern engines can readily use higher ethanol blends, and the new “flex fuel” models can operate on 85 percent blends.

Growth Energy, a national trade association representing more than 50 ethanol producers, has formally asked the EPA to allow E15 gasoline blends to be used in conventional engines. Giving drivers the option to choose E15 (this is a choice, not a mandate) would have an immediate and beneficial impact by creating American jobs, decreasing reliance on imported oil, and reducing greenhouse gas emissions.

The economic benefits of amending the regulation are enormous. The Windmill Group working with a team of North Dakota State University scientists estimates that raising the allowable ethanol blend from 10 percent to 15 percent will create more than 136,000 new jobs and inject $24.4 billion into the American economy annually. Lifting the blending limit in North Dakota could create $130 million in economic activity and nearly 2,400 jobs.

Those prospects are bright indeed, but the consequences of not raising the ethanol blend limit may also be significant.

Unless the blending limit is increased, it will be difficult, perhaps impossible, for the ethanol industry to meet the federal Renewable Fuels Standard (RFS), which requires the use and consumption of 36 billion gallons of biofuels by 2022.

Purdue University economists say if the barrier is not removed, ethanol production could level off by next year restricting our ability to achieve energy independence.

Moreover, if EPA does not approve the use of higher ethanol blends, innovation may be stifled for the next generation biofuels, like cellulosic ethanol. If the federal government continues to artificially limit ethanol’s use, it will destroy any incentive for innovation and stop cellulosic ethanol development before it even has a chance to get off the ground.

Increasing the use of ethanol in conventional engines is just one piece of the puzzle. Looking beyond E15, flexible fuel vehicles (FFVs) are another important market for ethanol. We can also look at ways to offer more choices by increasing fueling options at the gas pumps for flex-fuel vehicles, which currently can run on ethanol blends of up to 85 percent ethanol (E85). Blender pumps offer that opportunity for FFV owners/operators to dial in the percentage of ethanol they want to use.

A bill passed this year by our state legislature (SB 2228) authorizes the Department of Commerce to provide cost-sharing grants to fuel retailers for the installation of blender pumps.

Public policies, such as that contained Senate Bill 2228, are in North Dakota’s best interest. Other Midwestern states, such as South Dakota, Minnesota and Kansas, have adopted policies and programs to promote installation of blender pumps. North Dakota is doing the same. I applaud their efforts in fueling another sector our economic engine.

A better economy, more jobs and greater energy independence: ethanol is a winner in so many ways for North Dakota and the U.S. We can help the renewable fuels industry meet the federal Renewable Fuels Standard by creating new markets and new tools for ethanol producers and users. The use of E15 in conventional engines and blender pumps that offer additional fueling options for FFV owners are good policies to adopt, and movs us closer to energy independence.

Goehring is North Dakota agriculture commissioner.

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