Fuel prices in the U.S. have become a showstopper this year, with gasoline reaching over $3 per gallon. Farm country has eyes on The Hill as fuel-blending obligation discussions swirl.
BioUrja Ethanol Trading Manager Jordan Fife shared blending insights with AgriTalk’s host Chip Flory earlier this week.
Fife says when you pull up to the pump, 10% ethanol blended fuel is going to be cheaper than straight gasoline, even if they’re both at the 87 percent octane. He says there’s an octane deficit across the U.S. –and across the globe – because, “ethanol is cleaner burning, better for the environment, and the cheapest blend component by far.”
“If you drop the blend mandate lower, you would still be blending the same amount of ethanol again,” says Fife. “Once the small refinery exemptions happened in the Trump administration, everyone still blended the same amount because, while refiners have a love-hate relationship with ethanol, they need it.”
Fife says the United States built a system to facilitate ethanol into gasoline, and “to untie that knot would be almost impossible because additional pipeline space doesn’t exist.” Ethanol allows for this additional gasoline space, which creates what Fife calls a “marriage” between the two components.
BioUrja recently purchased ADM’s ethanol plant in Peoria, Ill., where, according to Fife, they intend to utilize corn oil in the production of biodiesel, rather than soybean oil.
“You can use corn oil to make renewable diesel, but it needs a little bit more of a purification process,” says Fife. “The difference between corn oil and soybean oil is soybean oil is currently overproduced and down in price, but historically, corn oil is cheaper.”
As it stands, President Biden’s Build Back Better (BBB) plan, if passed, will dedicate $1 billion to rural America and businesses like BioUrja.
In a
“Look at the Renewable Economy” House Agriculture Committee hearing on Tuesday, Rep. Cindy Axne (D-IA) stressed the climate crisis solution is rooted in rural America. She then begged the question, “What kind of benefits can we expect from the $1 billion investment in biofuels infrastructure within the bill?”
Growth Energy’s CEO Emily Skor says the Build Back Better investment in biofuels-related provisions will “unleash the power of biofuels.”
“Biofuels will give us the ability to work with our retail partners to accelerate the market inclusion of E15, which is a lower cost, lower carbon, higher-value fuel choice for consumers,” says Skor.
To hear more from Jordan Fife, listen here.
