Senators told of alternative-fuel transport challenges

Feb. 6, 2007
Congress should resist mandating higher volumes or quicker implementation of biofuels beyond the existing federal renewable fuels standard (RFS), a National Petrochemical & Refiners Association official told a US Senate committee Feb. 1.

Nick Snow
Washington Correspondent

WASHINGTON, DC, Feb. 6 -- Congress should resist mandating higher volumes or quicker implementation of biofuels beyond the existing federal renewable fuels standard (RFS), a National Petrochemical & Refiners Association official told a US Senate committee Feb. 1.

"Biofuels should be allowed to develop without a mandate and with a full understanding of their impact on energy supplies and air quality," NPRA Executive Vice-Pres. Charles T. Drevna said during a Senate Energy and Natural Resources Committee workshop on transportation biofuels.

He was part of a panel discussing national infrastructure integration.

Drevna warned in a written statement that transportation and logistical problems could grow as relatively new biofuels enter the market. Ethanol, which can't be shipped through pipelines because of its water solubility and corrosive properties, must be blended with gasoline at terminals, he said.

"This makes the distribution and the delivery of ethanol expensive because it requires more expensive transportation modes, such as trucks, rail cars, and ships. Therefore, any significant increase in the production of ethanol will result in more stress on the distribution system," Drevna said.

He urged Congress to preempt biofuel mandates adopted by several states and some municipalities. "The existing federal RFS mandate with its credit-trading provision contains a degree of freedom that allows the distribution system to operate at a low-cost optimum by avoiding infrastructure bottlenecks, such as lack of storage or rail capacity," he said.

Air quality impacts
Biofuels should be developed with full realization of their impact on air quality, Drevna said. He noted that ethanol increases gasoline's Reid vapor pressure, increasing emissions of volatile organic compounds during summer.

"Also, given the 8-hr ozone nonattainment national ambient air quality standards will result in many new nonattainment areas, it is unlikely that the mandated level of ethanol can be distributed in 9.0 [psi] rvp conventional gasoline areas without exacerbating ozone problems in nonattainment areas or creating new nonattainment areas," he said.

"The expansion of nonattainment areas will impose constraints on the usage of ethanol that will result in increased costs because the distribution system will be pushed away from the low-cost solution. These additional costs will be borne by consumers."

Michael Mears, vice-president for transportation at Magellan Midstream Partners LLP noted that ethanol transportation poses operational, technical, and economic challenges for pipeline owners and operators. "These include the practices and equipment to minimize water content and impurities, compatibility of existing seals and gaskets used in the valves and pumps, and the potential for stress corrosion cracking of pipelines and tanks," he said.

"Substantial research into the causes of these items, particularly the stress corrosion cracking issue, is needed. It is our responsibility to prevent pipeline leaks and protect the environment, so a complete understanding of this issue will be necessary before we are comfortable in considering ethanol transportation by pipeline. Targeted industry research on this matter is under way," said Mears, who also is chairman of the Association of Oil Pipe Lines.

He said that while limited opportunities may emerge to transport 10% ethanol blends in existing pipelines due to its relatively low concentration, "we believe the most likely opportunity to transport fuel grade ethanol will be in a dedicated pipeline built for that specific purpose."

He said a line from the Midwest to the East Coast could cost $2 billion or more. It also would require secure long-term commitments from ethanol producers or end-users, aggregation systems within the producing region since it could take "up to dozens of individual plants to baseload a pipeline," development of distribution systems at the pipeline's terminus, and designation of a regulator with ethanol pipeline oversight authority.

Mears suggested that Congress address these issues by funding a study of the technical concerns associated with transporting ethanol through pipelines and by passing the Ethanol Infrastructure Expansion Act of 2006 (S. 4003), which focuses attention on existing barriers, market risk, regulatory issues, and financial incentives using a range of ethanol production levels.

Not switching
Robert Brown, vehicle environmental engineering director at Ford Motor Co. said that while the three US automakers have committed to making more than 50% of their fleets capable of running on alternative fuels, consumers are not yet making the switch.

"To promote energy security initiatives, attention must be focused on addressing infrastructure deficiencies for alternative fuels. For today's most promising alternative fuel, E-85, Ford supports initiatives that encourage its production, expand retail access to it, and ensure that it is competitively priced," Brown said in a written response to one of the committee's questions.

He said major oil companies, who own or franchise most US retail fuel outlets, "indicate their business equation does not support the development of a truly competitive alternative fuel choice." He said over 95% of the fueling stations offering E-85 are independent retailers, mostly in the Midwest.

Contact Nick Snow at [email protected].