Ethanol: the Flexible Fuel Option

Transcription

1 Ethanol: the Flexible Fuel Option Nebraska s Energy Future Seminar Kearney, NE September 26, 2012 Presentation by Todd Sneller Nebraska Ethanol Board

2 Ethanol: Fuel of the Future Marketing Advanced Biofuels: Lincoln, NE Governor Bryan fills er up with 10% corn alcohol gasoline

3 Ethanol: it s here to stay Analysis: U.S. bankers say, love or hate it, ethanol here to stay- By Christine Stebbins, Reuters September 6, 2012 Any sudden change to the ethanol requirement in the Renewable Fuel Standard would have wide-ranging consequences because ethanol is already an integral part of the agriculture, energy and rural banking industries, farm bankers said.

4 Ethanol: a Key Refining Component Gasoline is a seasonally and geographically adjusted mix of nearly 300 hydrocarbon fractions. Many of these compounds like benzene, toluene and xylene are added to increase octane. BTX compound are toxic, carcinogenic and expensive. By contrast, ethanol is a higher octane (114) renewable molecule used in beverages, nutritional products, pharma products and food products; Ethanol can be used as a renewable fuel and as an octane enhancer in gasoline.

5 Ethanol: a Key Refining Component When used as an octane enhancer in gasoline ethanol increases the yield of gasoline from a barrel of oil. When used as a component of gasoline ethanol reduces the toxicity of gasoline. When used as a component of gasoline ethanol reduces carbon monoxide pollution by up to 30% and mitigates the formation of ozone in the atmosphere. Ethanol is the only oxygenated fuel used in the U.S. to meet stringent air quality standards.

6 Ethanol: a key component of our liquid transportation fuel supply In 2012 ethanol provides 10% of our liquid transportation fuel supply; Ethanol continues to be a reliable, domestic source of fuel in blends of 7.5% to 85% by volume. Domestic ethanol provides more than 3.8 times the fuel supply projected from the Bakken Shale Oil Formations in North Dakota. Ethanol provides more than 2.9 times the fuel supply projected from Canada via the XL Pipelines.

7 Ethanol: a key component of our liquid transportation fuel supply Ethanol provides more than 2.9 times the potential supply of fuel from the Arctic National Wildlife Refuges. It would take ALL of the annual crude oil production from ANWR, Keystone XL and Bakken- PLUS another billion gallons- to make enough gasoline to replace the new fuel volume that the ethanol industry has produced as a result of the Renewable Fuel Standard. In 2011 ethanol replaced the need for imported oil by 485 million barrels equivalent. That is more than the U.S. imported from Russia/Iraq/ Kuwait (321 m), Venezuela (333) or Saudi Arabia (395).

8 Ethanol: providing choices and lower costs to U.S. consumers The lower cost of ethanol in the fuel supply saved Nebraska motorists more than $50 million during Ethanol used in the gasoline supply reduces the outflow of money from the state when it displaces petroleum. Ethanol historically sells at a discount to gasoline. Ethanol prices may sell for as much as $1.00 below wholesale gasoline prices. Ethanol prices are significantly lower than hydrocarbon octane compounds having a lower octane rating. U.S. ethanol helped cut $0.89 on average from a gallon of gasoline in 2010.

9 Ethanol: an alternative to the Gasoline Mandate Biofuels cannot displace gasoline. Ethanol can provide a meaningful contribution to the liquid transportation fuel supply in the U.S. Biofuels can help mitigate gasoline price volatility and toxicity. Biofuels may provide additional choices to consumers at the fuel pump. Biofuels will continue to help meet increasingly more challenging fuel economy standards and fuel quality requirements.

10 Ethanol: an economic component of a sound U.S. energy policy Ethanol and other biofuels will continue to make economic, public health and environmental contributions if public policy supports these goals. Ethanol and other biofuels can help automakers meet increasingly more challenging CAFE and GHG reduction goals. Ethanol and other biofuels will continue to be the only economic means of meeting air quality and public health goals.

11 Ethanol: a Strategic Advantage Ethanol and other biofuels are among the few transportation fuel alternatives that fit into the current complex of petroleum distribution, blending and storage.

12 Nebraska s ethanol industry continues to generate a variety of economic benefits to local communities and the state.

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14 Nebraska Historical Ethanol Production Capacity (in gallons) 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000, ,000,000 0

15 Ethanol Production Creates Quality Jobs 83% of ethanol plant employees make over $42,000 per year NE Avg. Wage $56,158 for Ethanol sector and $41,800 for Manufacturing Sector. 99% of NE ethanol sector employees have employer-provided health insurance Source: Ethanol Producer Magazine Directly created 1,335 jobs in Nebraska Indirectly created over 7,700 jobs

16 Economic Impacts of Ethanol Production In 2011 the ethanol sector generated more than $85.8 million in direct NE household income. Total economic impact generated were $251 million during The ethanol sector generated more than $51.4 million in state tax revenue during More than half of Nebraska s corn crop is processed into ethanol and co-products. The value of the state s corn crop in 2010 was $7.86 billion. *Data provided in part by NPPD and UN-L

17 Technology Trends at NE Ethanol Plants In 2011 many of the NE dry mill plants began the process of corn oil extraction. By 2013 the majority of NE plants are expected to adopt this process. Other elements of modified fractionation may be adopted to diversity product slate and increase revenue ( value added concept). Focus on enzyme technology, energy use, water use, effluent use: process optimization is the challenge; profitability is the goal. Opportunities for co-location of Advanced Biofuel facilities at NE plants. Increased focus on transportation efficiencies (rail).

18 Thinking Outside the Box: a 2012 Ethanol Contingency Plan

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