EPA makes long-awaited decision on ethanol
By Heather Thorstensen
hthorstensen@agrinews.com
Date Modified: 10/28/2010 8:40 AM
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WASHINGTON— The Environmental Protection Agency's decision to allow more ethanol in fuel for some vehicles is expected to have little immediate impact at gas pumps.
Still, ethanol supporters say it's a good first step to increasing the country's use of the renewable fuel.
The livestock industry, however, is raising concerns that increased demand for corn could cause higher feed costs.
On Oct. 13, EPA increased the amount of ethanol allowed to be sold in fuel from 10 percent to 15 percent. This only applies to model year 2007 and newer cars and light trucks.
These cars will represent about one-third of the gasoline consumption next year, and half of the gasoline consumption by 2014, according to EPA.
The agency is expected to announce in November if E15 will be approved for model year 2001-2006 vehicles. That decision will depend on Department of Energy tests about E15's impact on engine durability and emissions.
The agency has decided not to approve E15 for model year 2000 and older cars and light trucks, or in any motorcycles, heavy-duty vehicles or non-road engines. E15 was not approved for these vehicles because there is not enough testing data at this time.
These decisions are in response to a petition for E15 use submitted by Growth Energy and 54 ethanol manufacturers in March 2009.
E15 approval comes with conditions that address fuel and ethanol quality standards and proposes E15 pump labeling requirements to help consumers understand if their vehicle should use the higher blend. The proposal would require the fuel industry to specify the amount of ethanol content sold to retailers. Retail stations would be surveyed quarterly to help ensure pumps are properly labeled.
Minnesota's ag commissioner Gene Hugoson and Iowa Secretary of Agriculture Bill Northey both said EPA's decision will not increase ethanol demand or usage in their states. The number of vehicles on the road today authorized to use E15 doesn't represent enough of the market that retailers will make investments in pumps or storage to be able to sell it.
In Minnesota, E10 is required in all gasoline, but state law does not require E15 be sold unless it's approved for all vehicles.
"Quite honestly, at least the way it stands now, not much will change here in Minnesota," Hugoson said, estimating only 15 percent to 20 percent of Minnesota vehicles are model years 2007 and newer.
He's concerned the split decision and labeling requirements may lead consumers to believe there's a documented difference of performance when E15 is used in older cars.
"Part of our past experience shows that when you have cautionary statements on pumps, immediately consumers think there's something wrong with the product," he said.
He would prefer EPA approve E15 for all models so signage isn't required.
Lance Klatt, executive director of the Minnesota Service Station and Convenience Store Association, said his members, which include gas station owners, are supportive of renewable energy, but they feel there's too many unknowns about E15.
"Our members and retailers are concerned (about) what does E15 do to the pumps, the nozzles, the lines? We never really experienced much more than 10 percent," he said.
They're also concerned about penalties if customers put E15 in an unapproved vehicle.
Iowa doesn't mandate ethanol use, but state tax credits support sales.
As ag secretary to the country's largest ethanol producing state, Iowa's Bill Northey has stated his confidence in ethanol.
"I believe the science is there to approve E15 for more vehicles and I hope EPA moves forward with that decision quickly," he said.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, said E15 would start showing up at the pump when EPA approves its use in 2001 and newer vehicles. He's heard these cars, on a nationwide basis, use 60 percent to 65 percent of gasoline.
Increasing ethanol blends from E10 to E15 would create a market for an additional 7 billion gallons of ethanol, he said, makingE15 adoption "absolutely crucial" for the country to meet the federal renewable fuel standard. The standard requires 36 billion gallons of renewable fuels be used by 2022.