• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 6 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 13 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 9 hours Wonders of Shale- Gas,bringing investments and jobs to the US
  • 6 hours Why is Strait of Hormuz the World's Most Important Oil Artery
  • 3 mins Trump bogged down in Mideast quagmire. US spent $Trillions, lost Thousands of lives, and lost goodwill. FOR WHAT? US interests ? WHAT INTEREST ? . . . . China greatest threat next 50 years.
  • 4 hours California's Oil Industry Collapses Despite Shale Boom
  • 3 hours North Dakota oil output totals 1.39 million b/d in March, up 4% on month: state
  • 34 mins Misunderstanding between USA and Iran the cause of current stand off, I call BS
  • 2 hours Rural and Conservative: Polish Towns Go 'LGBT free' Ahead Of Bitter European Election Campaign
  • 2 hours Global Warming Making The Rich Richer
  • 8 hours IMO2020 To scrub or not to scrub
  • 9 hours Knock-Knock: Aircraft Carrier Seen As Barometer Of Tensions With Iran
  • 13 hours Crude oil?
  • 6 hours Iceland Reducing Gas Stations By Half By 2025
  • 1 hour Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 9 hours "We cannot be relying on fossil fuels to burn as an energy source at all in our country" - Canadian NDP Political Leader
Alt Text

China Aims To Boost Ethanol Production

China’s growing demand for renewables…

Alt Text

The Billionaires Battling It Out Over Biofuel

The biofuel credit debate is…

Alt Text

Bioscience Breakthrough Turns Plant Waste Into Gasoline

Bioscience engineers have been making…

Joao Peixe

Joao Peixe

Joao is a writer for Oilprice.com

More Info

Trending Discussions

Washington Gives in to Pressure and Cuts Biofuel Mandate

After months of intense lobbying from rival quarters, Washington has proposed cutting the biofuels mandate for 2014 by 16% to 15.21 billion gallons.

This would be the first cut in biofuels requirements, which were ideally set to grow each year with incremental increases in renewable fuel targets laid out in a 2007 law.

For renewable fuel targets, this represents a major setback because not only is 15.21 billion gallons for 2014 much less than the originally intended 18.15 billion gallons, it is also less than this year’s mandate of 16.55 billion gallons.

Though the proposed cut is not as low as the oil industry was seeking (14.8 billion gallons), in part, this can be viewed as a lobbying victory for Big Oil; but there is more to it than that, including simple mathematics.

Related article: Rocky Mountain Tree-Killers, The New Biomass

The current and future ethanol mandates were created back in 2005 with the Renewable Fuel Standard (RFS), at a time when gas demand predictions were expected to be different. Now we have better fuel economy and demand for gas that is increasing slower than forecast.  In 2007, it looked like gas demand would continue to rise every year; instead, it peaked in 2008.

Beyond that, poultry companies are going bankrupt due to rising prices of feedstock as crops are diverted to ethanol. The rising costs of farming and egg production are taking their toll on states like Minnesota.  

And then we have the “blend wall”—the wall the market will hit when it has more biofuels than can be blended with gas. For refiners, hitting this wall necessitates either exporting more or producing less, which in turn could lead to shortages or higher prices at the pumps when they are just settling down a bit.

On the other side of this divide we have the biofuels producers, and states like Iowa that are reaping the benefits of all that demand for corn. This has come along with new jobs. Iowa will certainly baulk at the proposed cuts because the bulk of US biofuels are made from corn, with soybeans, grasses, crop waste and Brazilian sugarcane playing lesser roles. For 2014, the new proposal is to cut biofuels from soybeans and Brazilian sugarcane to between 2 and 2.51 billion gallons, while it looks like corn-based biofuel will be cut from 14.4 billion gallons to between 12.7 and 13.2 billion gallons.

The Advanced Biofuels Association has likened the proposal to pulling the rug out from under the biofuels industry.

Related article: Germany Looks to Straw for Home Heating

“Such a move will chill future investments necessary to produce large-scale quantities of renewable fuels that cut greenhouse gas emissions by at least 50 percent compared to gasoline,” says association president Michael McAdams.

Unfortunately, both sides are correct. The problem is that the RFS set it parameters too far ahead and predictions are a tricky thing. Flexibility is necessary and this is being learnt the hard way and will certainly have repercussions and this initial lack of flexibility—of RFS ranges—was a policy misstep on the part of the Environmental Protection Agency (EPA).

Now we have another two months to wait for the EPA to announce its final word on the issue and given the level of lobbying that has taken place so far, we could expect more changes at the eleventh hour.

By. Joao Peixe of Oilprice.com




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment
  • bmz on November 21 2013 said:
    One man's "pressure" is another man's knowledge.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News