U.S. Energy Administration Report Released: Biofuels and Trends

U.S. Energy Administration Report Released: Biofuels and Trends

from PEN-e from Pace Law School Library by Taryn Rucinski

Recently, the U.S. Energy Information Administration (EIA) released a report titled, Biofuels and Trends (2012). The 48-page report available here, was released on Oct. 15, 2012. Highlights for this report include the following:

• Ethanol grew from 8 percent of U.S. gasoline consumption by volume in 2009 to nearly 10 percent in 2011 and in the first eight months of 2012. With almost all gasoline in the United States already blended with 10 percent ethanol (E10), the maximum level approved for use in all cars and light trucks, significant increases in domestic consumption of ethanol face a blend wall unless higher percentage ethanol blends can achieve significant market penetration.

• While the U.S. Environmental Protection Agency (EPA) has approved use of a 15 percent ethanol blend (E15) for model year 2001 and newer cars and light trucks, concerns related to automobile warranties, potential liability for misfueling, and infrastructure costs are likely to limit E15 use to low volumes in the near term.

• Exports of ethanol increased substantially as producers looked abroad for new markets and Brazil experienced a poor sugar harvest during 2011-12.

• In the 2010/11 agricultural marketing year, 40 percent of the corn crop and 14 percent of soybean oil production was used to produce biofuels and other products, including distillers grains for use as animal feed.

• The federal excise tax credits for non-cellulosic ethanol and biodiesel and the ethanol import tariff expired at the end of 2011.

• A serious drought in the midwestern United States during summer 2012 lowered production estimates for corn and other crops, resulting in higher prices and a reduced forecast for biofuels production for the 2012/13 marketing year.

• Plans for a pipeline to deliver ethanol from the Midwest to the Northeast were withdrawn during 2011.

• Cellulosic biofuels production to date is far below the targets set by the Energy Independence and Security Act of 2007 (EISA 2007). EPA issued waivers that substantially reduced the cellulosic biofuels obligation under RFS2 for the 2010, 2011, and 2012 program years. Even that anticipated level of commercial production failed to materialize. There was no production of cellulosic biofuels or Renewable Identification Numbers (RINs) in 2010 or 2011. While a small number of cellulosic RINs may be available to be applied towards the reduced RFS2 requirements for 2012 set under EPA's waiver, production of cellulosic biofuel RINs in 2012 is likely to be well short of the reduced 2012 requirement. (footnotes omitted)