Is Ethanol Even Green?

Posted by Ed Burke on Jan 21, 2014 2:08:00 PM

Grassy Hillsides plowed into crop rows. Millions of acres of conservation land converted to corn fields. Fertilizer runoff polluting lakes and streams. All to produce a "green" fuel source.... Or that's the picture painted by an AP article slash expose anyway. 

The ethanol industry renounced the AP article as a "smear campaign" pointing out that fertilizer runoff and associated issues occur regardless of the end point of the corn produced. Another issue with the AP article is that the "conservation" land converted to corn fields wasn't exactly "conservation land" in the usual sense - essentially, much of it was designated conservation under an initiative that seemingly has less to do with conserving land than it does with boosting crop prices for farmers. While those points may be true, there is no doubt that corn based ethanol has environmental impacts, and there's even question on how much benefit to the environment the fuel itself produces, with the revelation that ethanol may be only about 16% "greener" than gasoline, which would technically disqualify it as a green alternative to gas.

The Senate has even introduced a bill to eliminate the ethanol portion of the RFS. This happened in December, just as the EPA announced it would reduce the ethanol blending goals in the standard. Not a good month for the Ethanol Industry, I would say. Senators Feinstein and Coburn - another unlikely alliance, cosponsored the bill. Both cited increased food costs as a result of diversion of corn into fuel supply, and the issues oil companies face with the blend wall - their inability to blend more ethanol into fuel without risking damage to consumer vehicles (that was the issue behind the EPAs reduction as well). [You can read a little more detail about the bill in my most recent Oil & Energy Article by clicking here]

So what does this all mean anyways? Its not likely ethanol will "go away" but both of these actions make it a little less burdensome on refiners and companies and protect the blend wall. It will be interesting to see how it shakes out over 2014 - the Obama administration strongly supports the corn based ethanol on the basis that it encourages biofuel adaptation in general and ethanol is a good starting point. There is no doubt that the mandate for corn based ethanol is extremely costly however, and with the undeniable impacts on food prices for both the industry and consumers, given the recent questions on the reality of its environmental impact, it seems to be time for politicians to really sit down and repair broken and costly regulations.  


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Topics: E85, Ethanol, RFS 2, EPA Mandate, RINs, Biofuels, EPA, Blend Wall

Environmentalists & Oil Exec's Unite on RFS Volume Reduction

Posted by Kelly Burke on Jan 14, 2014 9:47:00 AM

A surprisingly unusual coalition of folks have united to support the EPA's reduction of RFS Volume Requirements including food industry leaders, environmental groups, humanitarian groups and oil industry groups. Why is that? 

Everyone involved has concerns about different impacts they believe are created or exascerbated by the mandate, especially if the volumes hold or increase. Refiners, for example are concerned about their ability to breach the "blend wall", where every gallon of gasoline would contain the required 10% - once thats hit it will be extremely difficult for refiners to generate the neccessary RINs, largely because of concerns about moving past an E10 blend.

Refiners and Motorist groups like AAA argue that E15 is not approved for use in a large portion of vehicles, and 13 major car manufacturers will even void warranty coverage in vehicles running E15. That's a huge issue for folks with cars that are not model 2014. Even the Ethanol groups numbers on this issue leave approximately 250 million vehicles on the road that cannot run properly on E15 - that's not good news for Joe Six Pack.

So why are Environmental groups throwing their support behind a Volume Reduction? Isnt Ethanol supposed to be "green"? Well, maybe not. Original numbers put ethanol at 16% greener than gasoline, and then theres the more obvious environmental impacts. An estimated 5 million acres of land that had previously been set aside for conservation have been converted into farm land for corn for ethanol. Fertilizer run offs have worsened a "dead zone" in the Gulf of Mexico, and contaminated some local water supplies as well, according to an AP investigation. 

Food producers oppose the mandate on the basis that diversion of corn for use in fuel versus the food supply has driven up the cost of animal feed, as well as corn used in processing itself. 

Beyond just supporting the Volume Reductions, the groups in question support a full repeal of the RFS in many cases. 

I wrote an article for Oil & Energy Magazine that gets a little more detailed on the RFS Reduction, you can read it here if you are interested: Oil & Energy Magazine 

What are your thoughts on the RFS Mandate and potential Volume Reductions?

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Topics: Oil & Energy Magazine, Ethanol, RFS 2, EPA Mandate, Biofuels, EPA

Would CRUDE Exporting Increase Your Pain at the Pump? Not Necessarily

Posted by Ed Burke on Jan 7, 2014 1:43:00 PM

As we’ve discussed, proponents of overturning the ban on US Crude Exports cite the economic gain to be had, including jobs to be created.

An objection to lifting the ban on US Crude exporting is that given that US consumers are paying record prices for at-the-pump gasoline, it’s tough to see exporting the raw material to produce that gasoline. 

Gasoline prices, however are determined by global markets not domestic supply per se, although there is an influence. 

What's important to remember concerning the Crude Export ban is really two key factors:

It is permissible under US Law to export refined oils - ie finished products. If the argument for maintaining the ban is that it will negatively impact domestic gas supply, thats not really true as one could, today, export finished gasoline. In fact, the US is one of the world's largest exporters of finished (refined) diesel & gasoline. 

Secondly, and more importantly perhaps - the US refinery infrastructure has understandably not been able to keep up with the boom in production of crude, in both refinery capacity and transportation ability. This is resulting in downward pressure on the prices producers can get from refineries for their Crude, making it less profitable. Continued downward pressure could remove the incentive to produce in the first place.

What does that mean for pump prices? It means the incentive to produce and sell domestic crude to be refined into gasoline is not really there. Which, in turn, means the banning of exporting crude is not some automatic way to increase the domestic supply of refined gasoline. Without a large increase in supply, you dont get a decrease in price. 

So what about pricing if the ban is lifted? 

Again, gas prices are largely globally influenced, however exporting to nations that have refinery capacity will drive up the total supply and potentially lower prices.

Outside of this, the economic benefits to the US are estimated to be in the billions - and with an improving economy, if gasoline prices remain stagnant they become a lower percentage of expense for individuals which essentially has the same impact as a price drop in a stagnant economy. 


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Topics: Energy Independence, Fracking, CRUDE

Tier 3 Gasoline Standard Ruling to be released by February

Posted by Ed Burke on Dec 10, 2013 8:57:00 AM

The EPA has announced it will release the final rule on the Tier 3 gasoline standard by February of this coming year, after revising the timeline due to the volume of responses received. The standard  is set to be in effect by 2017, with the stated purpose of reducing harmful vehicle emissions and pollution generated by cars and light duty trucks by dropping the sulfur content of gasoline from its present 30 parts per million down to 10 parts per million. (If you recall, Tier 2 dropped gasolines sulfur content from 300 PPM to the current 30PPM) 

The EPA estimates the cost impact of Tier 3 should be around a penny per gallon, but refiners believe that it could be more like 9 cents per gallon. This is because of the overhaul needed at approximately 66 major US refineries to make their existing hydrotrating equipment meet the new standards, and the fear that there is not enough excess in supply to cover demand while the upgrades happen could shoot the price at the pump up.  

The EPA says that by the year 2030 the program should cost about 3.4 billion annually, that they claim is more than offset by the projected monetized health benefits of somewhere between 8 and 23 billion. 

I wrote an article for NEFI's Oil & Energy Magazine that goes into more detail on the standard and how it works, you can read that article here: Oil & Energy Magazine  or in PDF Form by clicking here 

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Topics: EPA Mandate, Refinery Closures, EPA, Tier 3 Gasoline Standard, Gasoline Supply Crunch

Is it Time to Overturn the US Crude Export Ban?

Posted by Ed Burke on Nov 8, 2013 3:33:00 PM

Congress is reportedly considering overturning laws banning US Oil Producers from exporting Crude. The law originally went into place in the 1970’s largely in reaction to embargoes that raised “scarcity” concerns – essentially, blocking export is supposed to safeguard from scarcity in domestic supply.  This is timely on their part – as we have seen for the first time since 1995, US Crude production has exceeded imports. What do they have to do with each other? In the absence of an export potential, or at least one not slowed and more expensive due to refining, US crude production will hit a plateau or worse. But why?

Refined oil  (gasoline and diesel) can be exported under current US law, and exports have grown substantially in recent years. The issue is, however, that the shale oil boom is producing huge volumes of light crude. In order to export, these huge amounts of crude need to be refined, which is difficult, costly and will ultimately slow production over time. The Council on Foreign Relations sums the issue up nicely in the following quote:

“Restrictions on crude oil exports are already beginning to undermine the efficiency of US oil economy. Much of the country’s rapidly growing production of light crude oil… comes from either areas where refiners are not interested in or able to process it, given that many US refineries are configured to run on lower-quality crude oil, or in parts of the country with inadequate transportation infrastructure. With few viable domestic buyers, producers are forced to choose between leaving oil in the ground and pumping it at depressed prices. The artificially low prices slow additional US Crude production. New refineries currently under construction will help remedy some of these market distortions over time, but a simpler, more cost effective solution would include allowing US Crude to be exported

(CFR Policy Innovation Memorandum No. 34 – you can read the whole thing by clicking here )

The CFR also estimates that Crude Oil exports could generate upward of $15 billion in annual revenue by 2017. Revenue to be made from export should also serve to stimulate continued investment in infrastructure, move technology forward, increase profitability for domestically based producers, not to mention create thousands of permanent, high paying jobs for Americans. 

Before we assume it’s a cut and dry decision however, there are several compelling arguments against dropping restrictions on Crude export, from economic concerns to environmental ones. Since this is a big and somewhat complex topic however, I will address them in subsequent posts.

What are your intial thoughts on US crude export policy? Do you favor a change?

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Topics: Energy Independence, US Crude Exports, US Energy Boom, CRUDE

How Effective is Your Safety Program?

Posted by Ed Burke on Sep 30, 2013 8:01:00 AM

We run a big fleet of trucks, including tankers, straightjobs, box trucks and a fleet of company vehicles driven by our sales team - so we have put a LOT of thought into safety program effectiveness. 

One of the main things we've learned is - It works if its working Proactively.

So how do you implement a proactive program? Think big picture. There are dozens of areas that when you think about it, ought to require a policy or procedure to avoid future issues. For example, we implement company policy on the following items, and make sure that all drivers and operations department personell are fully trained and informed on the policies so we are all on the same page. We have a full time Safety Manager and Operations Department that tracks and enforces all the variables, which may or may not work for your organization depending on size and need - but either way, if you run a trucking company, most or all of these items ought to be on your radar 

    • Rigorous Pre Employment Screening

    • Training - 15 days of documented training for new hires partnered with a senior driver or trainer

    • Distracted Driving Policy

    • Drug and Alcohol Testing Policy

    • Emergency Procedures - breakdowns, roll-overs, spills, etc. 

    • Vehicle Safety Compliance Policies

    • 90% max tank fill policy for site deliveries

    • Daily, documented pre and post trip vehicle inspections

    • Hours of Service Logs and Policy

    • Safety Meetings

    • Safety Bonuses

    • Full compliance with local, state and federal ordinances, laws and mandates

    • Tracking KPI's on DOT, CSA, and OSHA metrics, as well as tracking insurance variances, fines, and cost changes


    The list goes on, but these are the mission criticals. I get into a little more detail on each of the items in Septembers Oil & Energy Article (you can read that by clicking here)  

    What areas does your business focus on, and how do you measure your Safety Programs success?






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Topics: Safety, Safe Driving Policy, Oil & Energy Magazine

Solving for the Customer with Remote Wireless Fuel Tank Monitoring

Posted by Ed Burke on Aug 29, 2013 12:25:00 PM

In a world of ever appearing new technology the promises the world for your business, how do you decide what options justify the intense time and money investments? For us it comes down to a single two-part question, “Does this streamline our operations for our business and make our employees jobs better and more efficient?” And more importantly: “How does this enhance our customers’ experience?”

One of the technologies we’ve adapted over the past few years that delivers on both these criteria is wireless remote tank monitoring. If you’re unfamiliar, these are essentially small wireless transmitters that are installed on a fuel tank and push notifications on fuel levels periodically. The notifications go to a secure, cloud based platform.

This has been fantastic for both our dispatchers and drivers. Dispatchers are able to see levels on monitored customers’ tanks, so they are able to plan delivery routes out further and they are able to maximize delivery gallons as well (a 75% fill over a time based automatic that would typically be around 50%).  This makes drivers more efficient, and delivering more gallons in less time allows us to keep costs and therefore prices down. The monitoring also helps our customer service department by reducing the number of same-day urgent run out calls.

Certain industries have wide swings in product usage depending on different factors – a particularly busy marina weekend, an unexpected snow storm for a DPW, an unusually cold weekend, or a power outage kicking on your generator… I’ve been in the dispatch and driver seat on these kind of urgent calls and its extremely stressful – I don’t doubt its infinitely more so for the customer, and for a lot of people, being remotely monitored essentially takes this entire scenario off the table.  That allows you to focus on your business and your customers, rather than sticking a tank, calculating your usage, etc.

I wrote an article for Oil & Energy Magazine on wireless remote tank monitoring that gets a little more into the details, if you would like, you can read it here: Oil & Energy Magazine Online. If you’d like more info on our remote tank monitoring and other inventory controls, you can click HERE , or shoot us a comment or email.

Are any of you on remote monitoring currently? How has it helped (or not helped) your operations? 

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Topics: Marinas, customer service, remote tank monitoring

Energy in the News - Are Utility Rate Reductions Really A Positive?

Posted by Ed Burke on Aug 8, 2013 1:09:00 PM

This week a Federal Judge ruled that New England utility companies guaranteed profit rates are too high at their current rate of 11.1% and advised they be dropped to 9.7%. According to, this is projected to save electricity customers in Massachusetts approximately 50 million dollars a year (out of 115 million for New England as a whole).  

You can read the article here: Federal Judge Rules that Utility Profits Too High

However, utilities argue that these levels of return are necessary to make transmission improvements to avoid issues like those we experienced in New England in 2011. It was only about 2 years ago that Massachusetts and the New England region suffered huge, extended power outages from a couple brutal storms.  Additionally after Hurricane Sandy and events like it, we all seem to agree that there’s improvements needed in electric transmission and supply – and in fairness, utilities have projected huge spending on these projects in the coming years.  

An important point to remember also is the monumental, round the clock work utilities put in in emergencies like Sandy, tirelessly working to restore power to impacted areas. Our work in Emergency Fueling & Response has let us see that first hand and let me assure you, these people are unbelievably great in times of crisis. In theory these transmission upgrades should mean that in times of crisis, the outages will be a lot more manageable which should be a positive for just about everyone. 

The Edison Energy Group, according to has stated that investor-owned utilities will spend over 26 Billion on transmission improvement projects in2014 & 2015, and Massachusetts alone is expected to see 67 million dollars in improvements by 2017. That’s a pretty impressive level of investment and utilities argue those dollars come from their ability to project profit levels based on the guaranteed rates in question.

On the flip side however, Massachusetts has some of the highest electrical rates in the country, along with Connecticut and other New England States. According to the US Energy Information Administration. You can see the chart of rates here: 

Additionally, one of the regions’ major utility parent companies reported earnings 33% higher than in 2012. The year before that saw some controversy over bonuses paid out to utility executives, which seems to have been what spurned the case for lowered rates started two years ago by Massachusetts Attorney General Martha Coakley’s office.

Massachusetts consumers won’t see too much of an impact on their personal home bills, but businesses could benefit greatly from lowered costs. However, is there a potentially disastrous cost in the future without the transmission updates utilities say can only occur at the higher percentages?

What do you think?

Is this a good ruling or one that may seem “penny wise and pound foolish” in the event of another major storm impacting the area?

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Topics: EIA, Hurricane Sandy, Utility Rates, Emergency Fuel, Massachusetts

Mayflower Arkansas Highlights Keystone XL Environmental Concerns

Posted by Ed Burke on Jul 30, 2013 1:33:00 PM

It's not often that specific Energy Policy issues are topics for discussion at the average American dinner table, but a notable exception to this is the Keystone Pipeline XL. From the nationally televised Presidential primaries and debates of 2012 to dinner tables around the nation, people are divided on the issue and they are definitely talking about it.

On the one hand, the percieved positives are enormous - from thousands of jobs at various skill levels to national energy security benefits from importing oil from Canada versus say Venezuela, Nigeria, etc. On the other hand are those with serious environmental concerns, the largest of which is the potential for spills or pipeline leaks that could devastate environmentally sensitive areas. Several incidents this year have intensified environmental objections, perhaps the most significant being the Mayflower Arkansas spill caused by a rupture in the Pegasus pipeline. The Pegasus, built in 1940, runs 850,000 miles across the United States - it was reversed in 2006 to carry 95,000 barrels of crude to Texas from Illinois.

One of the contentions regarding the pipeline rupture that has relevance to both sides of the Keystone Project has to do with the conclusions reached by the investigation of the event. It was determined that an original manufacturing defect contributed to the rupture, meaning it was not a maintenance or corrosion issue that could have been forseen and prevented. Why is that important?

The Pegasus was built in the 1940s. The Keystone, proponents argue, will be manufactured and built with today's cutting edge technologies and will actually exceed recommended requirements for safety issued by the federal government. It will be the safest and most technologically advanced pipeline in existence. 

Opponents argue that a reason for the rupture in the Pegasus may be tied to the fact that the pipeline was designed to handle standard crude oil, not the "oil sands" crude that has a different composition. They argue that the composition of "oil sands oil" is a factor in safety and that the Mayflower spill illustrates that standards used for light sweet crude are not sufficient to ensure safety. Essentially - if those same standards are those being used to model the Keystone XL, they will not be sufficient to ensure that a disaster like this does not occur going forward.

Additionally the issue has been clouded with arguments for alternative energy sources versus "expanding dependence on oil" - some opponents see the pipeline as an issue not for its immediate environmental concerns per se, but as an issue of the US continuing down the 'wrong path' in continuing to focus on fossil fuel derived energy sources versus alternatives.

Representative (now Senator) Ed Markey (D- MA) stated that "The pipeline spill in Arkansas serves as a reminder that oil companies aren't doing a good job of transporting Canadian crude safely". What ought to be the focus moving forward on discussion, in my opinion, is a thoughtful consideration of both sides of the concern to get a true cost-benefit analysis, versus the stubborn "side taking" that seems to characterize the issue in Washington presently. While Ed Markey has a valid point, so does the CEO of TransCanada looking to expand the Keystone XL. He said, "The US needs 10 million barrels a day of imported oil. The proposed pipeline is not a question of oil versus alternative energy. It is a debate about whether you want to get your oil from Canada or Venezuela"  


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Topics: Mayflower, Pegasus Pipeline, Keystone XL

Hedging Risks Outside of the Finance Department Pays Big Dividends

Posted by Ed Burke on Jun 17, 2013 10:20:00 AM

We're all familiar to some extent with the payoff that can come with hedging financial risks in the industry. However, there are a lot of other risks out there for your company, so the question becomes 'how are you hedging that?'

I cannot say enough about our Safety Director, and the positive impact that our proactive Safety Program has had on everything from insurance costs to employee morale. A side effect we saw from really focusing on safety in all aspects of the job from drivers to office workers, was that documenting safe, proper procedures for everything from paperwork to offloading not only reduced errors and enhanced safety but ended up saving a lot of everyone's time.

In some ways, perhaps the underlying strategy for practical risk mitigation is efficiency.

Can your office handle several employees being out at once without losing days to "catch up" work? It can if you properly cross-train employees, and if you have documented, step-by-step process outlines for important tasks.

Can you streamline your inside teams - customer service, accounting, inside sales and save them time relaying customer information to your outside sales team? You can with proper networking and remote access. All our outside sales team members have server access as well as access to cloud based customer management systems and pricing modules, this allows them to find and use in-depth customer information without calling in or being stuck in the office. This lets them focus on their job, as well as reducing the time inside team members are taken away from their responsibilities.

Essentially, whether we are looking at spill prevention, bulk oil offloading, or preparing for the fiscal year ending coinciding with flu season (don't you love that?) we've found that focusing on mitigating potential risks ahead of time is a lot more effective than coming up with a crisis management plan after the fact - Just like it pays to watch the market and hedge your risks in case of price spikes, instead of hoping for the best and scrambling afterwards.

I wrote an article for O&E magazine on the topic of Operational Risk Management (ORM) - the steps involved in the approach, and some specific examples of where it has helped streamline our operations and mitigate our workplace risk. You can read the article in PDF form by clicking on the following link: Oil & Energy - Reduce Workplace Risk With A Proactive Approach





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Topics: Safety, Oil & Energy Magazine, Workplace Risk

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