Trump Vows to Make E-15 Gasoline Available Year-Round

Researched by Industrial Info Resources (Sugar Land, Texas)--In a blow to petroleum refiners, President Donald Trump told a political rally in Iowa earlier this week that he has instructed the Environmental Protection Agency (EPA) to begin allowing year-round sales of E-15, which is gasoline blended with 15% ethanol. Most gasoline available in the U.S. is blended with 10% or less ethanol, and sales of E-15 are not allowed in the U.S. over the summer months due to an increase in air pollutants such as ozone. In addition, some automobile manufacturers warn that their vehicles may not be compatible with E-15, and warranties will not cover E-15-related damage. Industrial Info is tracking more than 300 active ethanol-related projects in the U.S. The Midwest, home to the Corn Belt, has the highest amount of ethanol project activity in terms of value, thanks to high maintenance activity at existing production facilities, followed by the West Coast.

By law, refiners are required to blend a certain amount of ethanol into their gasoline. Trump's instruction to the EPA is good news for corn growers and ethanol producers, but bad for refiners, whose outlay for renewable fuels credits adds up to hundreds of millions of dollars each year for the largest refiners. Refiners and petroleum lobbying groups will almost certainly challenge any rule change in ethanol policy by the EPA. Smaller refiners are able to receive waivers from the EPA for the Renewable Fuel Standard (RFS), a move that has caused controversy due to what is perceived by ethanol producers as being too lax. Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) is one of the few major refiners with any sort of meaningful ethanol production of its own.

In a statement, Chet Thompson, chief executive officer of American Fuel & Petrochemical Manufactures (Washington, D.C.), said, "The president's proposal to waive the rules for E-15 is unlawful and could actually make the problems of the Renewable Fuel Standard worse. The president has promised to broker a deal to reform the RFS that works for all stakeholders. This isn't it."

Conversely, the Renewable Fuels Association (Washington, D.C.) said in a statement, "The de facto summertime ban on E-15 is the result of a burdensome, decades-old regulation that offers no environmental or economic benefit whatsoever. Eliminating the summertime barrier to E-15 will save consumers money and reduce emissions, enhance competition, and provide a boost to the farm economy."

Several of the newer ethanol projects being tracked by Industrial Info involve producing ethanol from sources other than corn, including municipal solid waste (MSW) and sugar cane feedstock.

Among the largest ethanol production projects being tracked by Industrial Info is California Ethanol & Power LLC's (Brawley, California) planned 66 million-gallon-per-year ethanol production facility in Brawley. In addition to ethanol, the facility will produce 930 million cubic feet per year of biomethane. The facility also will include a 49.9-megawatt (MW) cogeneration unit powered from sugar cane bagasse to supply more than 33 MW of power to the local grid and 16.3 MW for the ethanol production facility. Construction is set to kick off this year for completion by the end of 2020. Saipem SpA (San Donato Milanese, Italy) is providing engineering, procurement and construction (EPC). For more information, see Industrial Info's project reports on the ethanol plant and the cogeneration unit.

In Colwich, Kansas, ELEMENT LLC (Colwich), a joint venture of ICM Incorporated (Colwich) and The Andersons Incorporated (Maumee, Ohio), is underway with construction on a 70 million-gallon-per-year ethanol biorefinery that will produce ethanol from biomass feedstocks. Construction began earlier this year and is expected to be completed in the fourth quarter of 2019. For more information, see Industrial Info's project report.

Ringneck Energy LLC is nearing completion of a grassroot fuel ethanol plant in Onida, South Dakota. Construction began last year and is expected to be completed by the end of this year. The plant will use more than 28 million bushels per year of corn to produce 80 million gallons per year of ethanol, 12.5 million pounds per year of corn oil and 212,000 tons per year of distillers dried grains, which is commonly used as livestock feed. Fagen Incorporated (Granite Falls, Minnesota) is providing EPC. For more information, see Industrial Info's project report.

Among the MSW-to-ethanol projects being tracked by Industrial Info is Reclaimed Resources Incorporated's (Bristol, Tennessee) construction of a 60,000-gallon-per-day plant in Bristol. The facility, planned for construction on a brownfield site, will process 750 tons per day of MSW. The plant will be built in two phases, with Phase I consisting of the pre-treatment conditioning system and waste storage area, and Phase II including the fermentation and distillation systems. Fagen is providing EPC on the project, which is set to kick off next summer and take about two years to complete. For more information, see Industrial Info's project report.

These are a few of the many ethanol-related projects being tracked by Industrial Info in the U.S. While U.S. refiners and petroleum interests vow to fight the proposed lifting of E-15 restrictions, if the changes happen, ethanol project activity in the U.S. could ramp up.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.