There is a “Green New Deal” legislation being proposed in the United States. It consists on a set of proposed economic stimulus programs aim to address climate change and economic inequality.
The name is derived from the “New Deal” of social and economic reforms enacted by Franklin D. Roosevelt. The Green New Deal combines Roosevelt's economic approach with modern ideas such as renewable energy and resource efficiency.
Proponents of the new legislation need to take notice of the incredible U.S. ethanol success story regarding renewable energy.
With the implementation of the Renewable Fuel Standard (“RFS”), in 2018, the U.S. (largest biofuel producer in the world) produced 16.1 billion gallons of ethanol and 43 million metric tons of co-products and distillers oil that had substantial economic impacts, including:
a. 71,367 direct jobs
b. 294,516 indirect and induced jobs
c. $46 billion contribution to GDP
d. $25 billion in household income
e. $10 billion in tax revenue
The astounding 16.1 billion gallons of clean-burning renewable ethanol in 2018 was produced by 210 ethanol plants located across 27 states.
Total U.S. demand rose to a record 16.2 billion gallons, 300 million gallons more than a year ago, driven largely by record exports of over 1.6 billion gallons as global octane demand continues to grow.
In addition to record production levels, the industry delivered:
ENERGY INDEPENDANCE
Energy security is one of the main drivers behind the RFS. In 2018, the addition of 16.1 billion gallons of ethanol to the U.S. fuel supply displaced an equivalent 550 million barrels of oil. Without the contribution of 16.1 billion gallons of ethanol, U.S. import dependence would have been equivalent to 20% of petroleum demand.
CLEAN AIR
Ethanol displaces hydrocarbon substances like aromatics in gasoline, helping to reduce emissions of air toxics along with particulate matter, carbon monoxide, nitrogen oxides, and exhaust hydrocarbons. These pollutants cause smog and ground-level ozone and adversely affect human health.
FUTURE DEMAND DRIVERS
The company anticipates an additional 7 to10 billion gallons of new demand, within the next 5 to 10 years.
Among the expected demand drivers are the following:
1. New RFS being enacted globally.
The world is taking notice of the success of the United States and Brazil and new RFS are being implemented in Europe, The Caribbean and Asia. There are currently over 30 countries with a RFS mandates.
China alone (largest automobile market in the world), consumes 40 billion gallons of gasoline and one billion gallons of ethanol. Projections show that by 2020 gasoline consumption will reach 46 billion gallons (USDA 2017). Meeting the national new RFS-E10 mandate would require an extra 3.6 billion gallons of ethanol, putting China ahead of the European Union to become the world’s third-largest ethanol consumer.
2. The Market is demanding higher blends
The implementation of E15 year-round could alone deliver new demand requirements of 4 billion new gallons. E85 continues to be available at the pump for Flex-Fuel vehicles and growing in volumes.
3. The U.S. Automobile Manufacturers are proposing higher octane fuels.
A General Motors representative, recently told industry leaders at the 2019 National Ethanol Conference that the industry will work to eliminate lower research octane number (“RON”) gasoline, and designate a 95 RON only fuel. The industry requires the higher octane fuel in order to meet the future efficiency of engines and higher requirements on miles-per-gallon.
The higher octane is accomplished by blending more ethanol (E30). A new national standard of 95 RON will require an increase of 7% in ethanol production annually.
The industry needs to prepare to meet the new demand by utilizing technology to deliver higher yields, use of alternate feedstocks (cellulosic) and improve the use and sources of energy, eliminating the use of hydrocarbons to be 100% renewable, aligning with the Green New Deal.
For additional information, please contact the company.
