WASHINGTON, July 19, 2016 - The battle over the amount of biofuels that will be blended into the U.S. gasoline supply is intensifying as the Environmental Protection Agency moves closer to the Nov. 30 deadline to set 2017 volume requirements under the Renewable Fuel Standard (RFS).
At the heart of this battle – as evidenced in the nearly 600,000 sharply divergent public comments EPA received during a comment period that closed July 11 – is the ethanol industry’s push for much greater use of E15 and E85. E15 is the 15 percent ethanol blend that Energy Department testing has approved for all 2001 and newer vehicles, and E85 is certified as suitable for the 8 percent of the U.S. auto fleet with “flex fuel” engines.
The ethanol industry insists that biofuels can increase their market share dramatically if the higher blends of renewable fuels can overcome the powerful oil industry’s determined opposition. And the oil industry counters that using the higher blends can cause expensive damage to your car or boat engine.
The push for greater use of higher ethanol blends is being matched blow for blow. The oil industry demands that Congress either repeal the RFS entirely or at least cap ethanol use at 9.7 percent of the U.S. transportation fuel market – down from current use of over 10 percent. Demonstrating bipartisan support for a 9.7 percent hard cap, 10 House Democrats have joined 93 Republicans as co-sponsors of the Food and Fuel Consumer Protection Act of 2016, HR 5180, introduced by Rep. Bill Flores, R-Texas.
One sign of the intensifying battle and how it’s being fought is that Growth Energy appointed a new CEO in May, picking Emily Skor, an expert in crisis management, consumer education, and orchestrating grassroots impact on federal regulations and legislation. Skor says her pro-ethanol trade association’s task is “to build our influence beyond the Corn Belt and beyond the Beltway.”
In sharp contrast to ethanol’s critics, Skor tells Agri-Pulse that “the auto fleet and the ethanol producers absolutely have the capacity to go well beyond 10 percent . . . The critical thing is making sure that consumers have access to choices. When they have access, we’re seeing that consumers are choosing higher blends of ethanol.”
Skor says that the EPA’s RFS mandate requiring ethanol use “is a successful energy policy that’s moving America forward. It’s promoting economic growth and energy security, and frankly it’s helping isolate America from the volatile price of oil coming from hostile nations.”
Leading the effort to reduce ethanol use, American Petroleum Institute (API) Downstream Group Director Frank Macchiarola wrote in a cover letter accompanying his July 11 comments to EPA that:
“Despite significant incentives offered to every part of the supply chain, motorists have largely rejected E85. There are vehicle and infrastructure compatibility issues with both E15 and E85. Only flexible fuel vehicles can use E85 and only flexible fuel vehicles and a small fraction of existing vehicles were designed and warranted to tolerate E15. It is not reasonable for EPA to assume any significant near-term ethanol volume increases from the use of E15 and E85.”
Macchiarola’s contention that only “a small fraction” of vehicles can “tolerate E15” is based on controversial oil industry research that warned about potential problems with E15 use, despite more rigorous Energy Department testing results that cleared E15 for all 2001 and newer cars and light trucks.
(Click on the following links to read the full comments submitted to EPA on July 11 by Growth Energy (three documents totaling 640 pages) and the American Petroleum Institute (five documents, 87 pages).)
In contrast to API dismissing E15 and E85 as relatively insignificant niche markets, Growth Energy points out that in Minnesota, where 38 gas stations now sell E15, the Minnoco chain has locations where E15 provides as much as 45 percent of sales without any reports of misfueling or engine damage. With other retailers following Minnoco, Sheetz, Kum & Go, MAPCO, Murphy USA, and Protec in offering E15 and higher blends, Growth Energy is confident that sales of higher blends will soar as more blender pumps are installed across the country to allow greater consumer choice.
Growth Energy reports that thanks to independent retailers offering the higher blends that major oil companies have fought, “American drivers are embracing biofuels – like E15 – because they recognize the benefits from fewer toxic emissions to increased engine performance to reduced oil imports. Over the past 12 months, consumers have chosen E15 and driven more than 150 million miles using E15 without any negative effects.”
Growth Energy’s Director of Regulatory Affairs, Chris Bliley, tells Agri-Pulse that “E15 is approved for all 2001 and newer vehicles, more than 87 percent of automobiles on the road today. E15 is now sold at more than 250 locations in 23 states and has been on the market for five years. In that time, there have been no reports of misfueling, nor any reports of damage. Additionally, NASCAR has run 10 million miles on E15 in the harshest driving conditions on the planet.”
Yet American Petroleum Institute Senior Policy Advisor Patrick Kelly tells Agri-Pulse that “to expect a dramatic increase in the sales of E85 when only 1 and a half percent of retail stations offer it, I think is unrealistic.”
“The fact that EPA has set standards beyond 10 percent for 2016 and is proposing to do so for 2017,” Kelly says, shows that EPA is unrealistically expecting the use of higher ethanol blends to increase far faster than current use patterns could support.
To fix what he calls EPA’s “broken” RFS program, Kelly says API would “love to see Congress repeal the program. We would also support Congress limiting the program to not exceed 9.7 percent.”
Kelly says EPA should recognize the legitimate demand for ethanol-free E0 for use in boats, motorcycles, lawnmowers and for other uses – demand that the Energy Department has pegged at 5.3 billion gallons of E0 for 2015, roughly 3 percent of the gasoline pool. Kelly says EPA is wrong “to ignore the E0 market” and instead mandate greater use of ethanol. API’s Macchiarola states that “It is not reasonable for EPA to assume any significant near-term ethanol volume increases from the use of E15 and E85.”
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