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A Crisis Looms - It's Starting to Happen Just as I Predicted!
Since Marathon's announcement in early June, readers have been e-mailing me weekly with stations that were previously ethanol FREE that have now converted to ethanol gas. A few days ago, I received an e-mail from a reader who lives in the Monroe area. He informed me that 12 stations supplied by one Distributor alone in the area had to convert to ethanol gas because the distributor could no longer get ethanol free gas since Marathon stopped supplying it to north Louisiana he said (he says he knows this Distributor owner personally). In all, twenty eight (28) stations have been forced to convert to ethanol gas in less than a month since Marathon’s announcement – so far! Most that were forced to convert are in north Louisiana, but some in south and southwest Louisiana also. And, I'm fearful it will get much worse. As I have said before, I believe that Marathon was the largest remaining supplier of ethanol free gas to south and north Louisiana before they fell for the VEETC tax credit 'bait', and, like the rest of the major refiners in Louisiana, allowed their greed for the Federal $0.45/gallon tax credit subsidy to over come their sense of fairness to Louisiana consumers by blending ALL of their gasoline as ethanol gas instead of only the 8% required by the EPA. All of the stations I've contacted that have switched to E-10 cited difficulty in getting ethanol free gas as the reason for the switch. All said they would have preferred to continue to sell ethanol free gas if it were available.
Since the US Congress and Senate voted to kill the Federal refinery VEETC $0.45/gallon tax credit subsidy in late June (will take effect at the end of this year), hopefully this will take away some of the incentive for refineries to blend ALL their gas as ethanol gas even though EPA only requires them to blend 8.0% this year. We'll see what happens in 2012.
As I explained to the Louisiana Legislative Commerce Committee in my testimony in mid June in Baton Rouge, if the current E-10 stations all convert to E-15 later this year and in 2012, AND, there is not an ample and readily available supply of ethanol FREE gas, we will face a VERY SERIOUS CRISIS in Louisiana! The 319,950 registered boats in Louisiana will become big 'anchors' as NOT ONE marine engine can operate on 15% ethanol gas. It is possible that some boat marinas may be able to still get “recreational fuel” (ethanol free, but much higher priced than regular ethanol free regular), but not all marinas sell gas. In addition to marine engines, motorcycles, four wheelers, jet skis, chain saws, all lawn and garden tools and cars and light trucks model 2000 and older CANNOT OPERATE on 15% ethanol gas. In fact, the newly announced EPA labeling rule for E-15 gas (read it on PeteLandrysRealGas.com “Current Ethanol News” page) clearly says on the label that “it is prohibited by Federal law” to use 15% ethanol gas in engines it is not designed for. Let's hope this potential crisis is averted and that Louisiana refiners face reality and prevent it from happening by blending more ethanol free gas and make it available throughout the State! If not, there will be MILLIONS OF VERY ANGRY PEOPLE IN LOUISIANA who will be looking for someone's scalp. And, I predict that consumers will blame the Louisiana Legislature for not acting to address this issue and mostly Louisiana refineries, who will likely feel the wrath of Louisiana consumers affected if this happens, especially when they learn that the EPA only requires them to blend 8% of their total gasoline sales (only 8 gallons out of 100) as ethanol gas in 2011. And, I can assure you that the Louisiana newsprint and TV media will make consumers in Louisiana aware of this fact. Refineries will have no defense on this issue either since there is NO State or Federal requirement that they blend all their gas as ethanol gas as they have chosen to do.
I will try again in the next Louisiana Legislative session in 2012 to again make the Louisiana Legislature acutely aware of this looming crisis. Hopefully, they will elect to act on some of the recommendations I suggested to the Legislative Commerce Committee this past June. If the Legislature doesn’t act, and E-15 replaces all the E-10 stations and refineries do not blend more ethanol free gas to meet consumer demand, consumers only remaining recourse might be class action litigation as several readers have suggested. I do hope it does not come to that, but it will be up to the State Legislature and Louisiana refineries to address this issue before it becomes a crisis.
If you haven't read http://www.PeteLandrysRealGas.com lately, I've posted several articles on the 'Forum' section you might be interested in reading (NOTE: You don't have to register on the Forum to read articles on the boards - only if you want to post a comment or info). One is the Louisiana State's law on ethanol gas. This law DOES NOT have ANY requirement that all stations sell ethanol gas now or at some point in the future as some distributors are misleading retailers into believing and coercing them to switch to E-10 even though ethanol free gas is still available in their area. I've also posted an article on Louisiana's ONLY ethanol manufacturing plant, a 1.4 million gallon per year “bio ethanol” plant owned and operated by BP, making ethanol from bagasse (a by product of sugar cane manufacturing) in Jennings in Jefferson Davis Parish.
As I said earlier, I also posted a few days ago on the “Current Ethanol News” page the Federal EPA announcement of the final warning pump label for retailers for E-15 gas later this year when it is expected to become a reality and start showing up in stations.
Please e-mail me at way2gopete@yahoo.com should you learn of a station currently on the website's Ethanol Free Gas Station List that has converted to ethanol so I can take it off the list.
Please e-mail me should you have any questions.
'Pete'
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'Fishhfiles', why are you so negative on this issue? Do you own an ethanol gas station? I can assure your prediction WILL NOT happen. I know personally the top class action attorney in the Country. He would love to get this case if that would be the only way to resolve this matter.
As I've said before, Nebraska, one of the States that makes ethanol and one of the largest corn growing states in the Country, offers consumers a choice of buying ethanol gas or ethanol free gas at each station. The Agriculture Commissioner of Nebraska told me that they do this voluntary throughout Nebraska. I saw this personally when I went to the College World Series in Omaha in 2009.
Are you ready to park your car or truck if you own a 2000 or older model, or your boat if all stations become E-15? What about your lawnmower? How would you cut your lawn? Don't you see or understand the potential crisis if all stations are ethanol gas and they all convert to E-15?
I can assure you that the Louisiana public will not let this happen. I am trying to do my part by informing and educating the public on this matter. What are you doing to help?
'Pete'
don't forget generators, I check mine before every hurricane season and I had $300 of repairs on the fuel system because of that damn ethanol.
I wonder how many people are going to be surprised when the power goes out....
sue 'em!! sue'em!!!
You're right Kruser........portable generators are also at serious risk in using ethanol gas. They can't operate on 'E-15' either. Same engines as lawn mowers, etc.
Thanks for pointing that out.....especially important as we are just entering the hurricane season.
'Pete'
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I am so negative on it Pete because they are sticking it up our butts and they are going to do what ever they want ,this has been coming for a long time now , I heard about it before Katrina and it is not just ethonal and it is happening now , I wish you well in your quest but feel that you can take it to the Supreme Court and win and it is still going to happen the way they want it to , look what happened with the drilling moritorium , judge found it unconstitutional but they still did it , they tied it up in burarcacy B.S. and crammed it ------- I am a heavy equipment mechanic by trade and don't see a whole alot of gas powered equipment at work , but I do see the affects of what ethonal does small engines , I have alot of gas powered toys and tools and have had a lot of problems that cost me parts and my time fixing , and I am P.O.'ed to say the least ------------ are you up on Tier 4 emmisions for engines over 75 hp , the new Ford and GMC and constuction equipment have to abide by the 2012 emmission standards , Chrylser used fuel credits to skip to 2014 , alot of the new models trucks and equipment have uria tanks on them , that's chicken pee that gets injected into the catalitic convertor to make it burn hotter to reduce emmissions , there are alot of 1 tons and big rigs on the streets right now burning it fuel stops last I checked was $5.35 per gallon and not too many have it , some use concentrated uria which cost more than Crown Royal , the regular uria is so corrisive that it has to be stored in plastic , it eats right thru metal , some engines have to go in to the dealership and have the catalitic convertor scrubbed every so many hours at additional cost with a machine that I hear cost $50,000 , the new small dirt machines cost and extra $8,000 up for the added junk , add all that to the cost per mile you drive or hours you put on a machine , to be able to work a machine on a job that is Federally funded , municapality work or any job that is OSHA regulated the equipment will have to be 2012 Tier 4 compliant or not allowed on the job site , have you seen whats happening to some equipment rental stores , machines like million dollar cranes will have to be retrofitted , if you try and buy a new motor right now , and been that way for quite a while , for your equipment from a dealer like Cat , you can't , you have to buy a Tier 4 and upgrade your machine to accept it , the upgrades cost as much as the motor does , Cat tell me that soon if you bring in a machine for them to work on and it is not Tier 4 they will not be able to work on it for you , the software and code guides to troubleshot the new systems with ' fly by wire ' technoligies are protected and are for technicians of the dealership only , that section is not included in high dollars service manuals and as I have read on the bottom of the pages the information is not to be viewed by the owner of the machine , I know some one who just went thru it with a boat , the boat was just built and a remaned engine was installed , no Coast Guard certifaction was given cause the motor was not Tier 4 and the boat has to all be redone ----------it's alot more than just ethonal gas that we have to worry about , I think premium recreational fuel is about all that will be around soon ---------kinda crazy isn't it to grow acres of corn that could feed cows and chickens to get a few gallons of junk that destroys small engines which makes food go up in price and not drill off our coast , but La. didn't vote for him so he stuck it to us on that , have you bought a ribeye or deer feeder corn lately -------------
We keep voting in the same old gang that votes with this gang and not what we want.
MarshManiac, suggest you read this article about the US Senate voting to kill the refinery tax credit subsidy:
http://www.bloomberg.com/news/2011-06-16/senate-votes-to-end-tax-break-for-ethanol.html
After you read this, do you still stand by your statement that refineries only get 4.5 cents/gallon to blend ethanol gas?
Again, the Federal VEETC refinery tax credit is $0.45/gallon .........you're thinking of the tax credit that gas stations get....4.5 cents/gallon. I have had at least two distributors and three station owners tell me that they (gas stations) only get only 4.5 cents/gallon.
'Pete'
ahhh you are correct on this one
the blender's credit
yes, I was thinking of the distributor's credit of 4.5 cents
it still won't stop blended fuels from being sold, however, too much money invested in blending equipment
the refineries will just keep the rest of the 4.5 cents (most only 'give' you 1.5) and everyone's fuel cost will go up...because E-10 is a 'green' fuel ha
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MarshManiac, I'm glad you finally got to read the article. You say there is so much money invested in blenders, etc. These devices don't cost a fortune. Terminals added a tank to store ethanol and added a blender, that's pretty much all the equipment there is. But, don't forget refineries nation wide have been collecting $5 billion annually on this $0.45/gallon VEETC tax credit for over 10 years! They've paid for their initial investment many, many times over and are way ahead.
If the tax credit was not the reason for nearly all major refineries to blend essentially all of their total gasoline sales as ethanol, they why do they do it? You think the refinery CEO's are 'tree huggers'? There is no Louisiana State law (I posted our State ethanol laws on my website's Forum page) nor Federal law that requires them to blend all their gas as ethanol gas.......so why do they do it? This year, EPA only requires them to blend 8.0% of their total gas sales as ethanol gas. I'm going to continue researching until I find the reason.
Whatever the reason, if all 10% ethanol stations convert to 15% ethanol gas next year, AND, we don't have a reliably available source of ethanol free gas, we're in for BIG TROUBLE! And, if this does happen, the refineries are in for a HUGE 'public relations nightmare' when the public becomes fully aware that they do not have to blend all their gas as ethanol as they are doing now. And, you know the media, both print and TV media will be on this issue big time. It won't be only be a Louisiana issue, but a national issue. There are currently many States in which you can't find any ethanol free gas. So, if you have ONLY 15% ethanol gas, and you can't find gas for your boat, motorcycle, lawn and garden tools, or your 1996 car or truck, what are you to do? Did you see the EPA's warning label for 15% ethanol gas? Read the article on http://www.petelandrysrealgas.com on the 'Current Ethanol News' page to see the label. The Feds are covering their butts in the last sentence......read it and you'll see what I mean.
'Pete'
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Pete , I told you in your other post what was going to happen and you asked where did I get my information from , I am sticking with what I heard and soon your list of stations with regular non ethonal gas will be ' zero '