There's been a lot of talk, a great deal of hype since the first of the year about renewable energy. President Bush in his State of the Union address called for an aggressive program to wean our nation from imported oil with emphasis on locally produced, renewable fuels. Iowa Gov. Tom Vilsack in his State of the State address called for Iowa to become the leading state in the nation in production of renewable fuels.
The blend of 85% ethanol, 15% gasoline, E-85, that can run in specially equipped vehicles, flexible fuel vehicles (FFVs), has become the poster child for Iowa's renewable fuels industry. While E-85 is the future, the force driving the market now is E-10, the ethanol blend that you can buy nearly everywhere and run in any vehicle.
Did you realize that ethanol is in short supply now? Markets on the east and west coast, during the winter need to have reformulated gasolines to meet clean air standards. There are two additives that are used to oxygenate fuel: petroleum based MTBE and ethanol. The same hurricanes that knocked refineries off line this fall have put a serious dent in MTBE production, forcing the use of ethanol in markets where it had not been used.
Ethanol made in Iowa is now being used and oil companies, who need to repair and reinvest in refineries to make MTBE, may choose to abandon the product, citing pollution concerns associated with the additive. MTBE's loss is ethanol's permanent market gain.
While legislators ponder ways to increase E-85's market share, they should consider the successful business model created by E-10, where persistence and perseverance win out over mandates. Iowa legislators should do all they can to increase the number FFVs on the road. The use of E-85 will follow and eventually lead us to energy independence.