Policy Journal: E15 Cleared for ’07 and Newer Cars, Light Trucks

November 10, 2010 02:55 AM
Policy Journal: E15 Cleared for ’07 and Newer Cars, Light Trucks

The Environmental Protection Agency (EPA) gave the green light for the use of E15 (15% ethanol, 85% gasoline) in model year 2007 and newer cars and light trucks. A decision to allow E15 in model year 2001 to 2006 vehicles is still pending.

However, the agency said in making the announcement last month that it would not approve E15 for 2000 and older vehicles, or for motorcycles, heavy-duty vehicles and nonroad engines. The reason, according to Gina McCarthy, EPA assistant administrator for air and radiation, is that testing data does not support such a decision yet.

In allowing E15 for 2007 and newer cars and light trucks, McCarthy said, EPA utilized testing data from the Department of Energy (DOE) that signaled no negative impacts for E15 use with those engines.

McCarthy tried to dispel the notion that E15 must be used in those vehicles. “EPA is not requiring the use of E15,” she said. “EPA does not have the authority to require its use.” But the decision will allow use of E15 “where and when that is available.”

Industry feedback. Reactions varied, but USDA Secretary Tom Vilsack heralded the decision, saying it “will help get existing ethanol capacity into the market.” He added that the decision “provides biomass and biofuel producers with additional revenue enhancing opportunities.”

One of the main ethanol backers has been the National Corn Growers Association, but Bart Schott, the group’s president, said he is “disappointed in the very limited scope of this approval, but pleased the EPA has finally taken action to partially approve the waiver request to allow higher blends of ethanol in some motor vehicles. We believe this bifurcation of the approval process, and the labels that are expected to be placed on higher-blend fuel pumps, can lead to general consumer confusion and therefore act counter to the original intent.”

McCarthy responded that EPA opted to announce the 2007 and newer vehicle decision when it was ready “rather than hold off and do a larger decision later.”

Renewable Fuels Association President Bob Dinneen was equally blunt, saying: “EPA’s scientifically unjustified bifurcation of the U.S. car market will do little to move the needle and expand ethanol use today. Limiting E15 use to 2007 and newer vehicles only creates confusion for retailers and consumers alike. America’s ethanol producers are hitting an artificial blend wall today.”

Rep. Stephanie Herseth-Sandlin (D-S.D.) had her eye down the road when talking about the decision. “Equally crucial is the expected approval later this year of E15 for model years 2001 to 2006, which would then cover a substantial amount of vehicles on our nation’s roads, create jobs, and promise millions of consumers greater choice at the pump,” she said.

“We are pleased that EPA has finally reached a decision regarding the E15 waiver and will permit 2007 model year and newer vehicles to run on a 15% ethanol blend,” said Roger Johnson, president of the National Farmers Union. “This decision means 18% of the fleet, or 43 million vehicles, will be able to use a cleaner fuel blend.”

Meanwhile, livestock industry groups urged caution going forward. The National Pork Producers Council released a statement saying it is “very concerned with the effect on America’s pork producers of raising to 15% the amount of corn ethanol that can be blended into gasoline.” The group said it will withhold comment on raising the blend rate to E15 from its current E10 “until we can consult with our economists. But any upward pressure on corn prices will have a negative effect on producers.”

Misfuel fears. One of the chief concerns surrounding the E15 decision is the potential for consumers to put the wrong fuel in their vehicle. In an effort to prevent that, EPA is proposing new E15 pump labeling requirements, including a rule that the fuel industry specify the ethanol content of gasoline sold to retailers. There would also be a quarterly survey of retail stations to help ensure their gas pumps are properly labeled.

The proposed label (see above) has caused a stir. “I don’t think anyone could say with a straight face that this label would do anything except reduce the amount of E15 sold, even in applications where it’s allowed,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

When might this situation be finalized? It’s an open question. EPA’s proposed rule on labeling of gas pumps has a 60-day comment period. As of this writing, the rule has still not been published in the Federal Register, so comments will now run well into December.

That could bump against the schedule for EPA’s decision on model year 2001 to 2006 vehicles. The DOE testing on later-model vehicles is expected to be completed and the data delivered to EPA by the end of November. Once that data is in hand, EPA Administrator Lisa Jackson promises, an announcement will follow quickly.

EPA’s McCarthy says the decision process for model year 2001 to 2006 vehicles won’t necessarily be the same as the process for 2007 and newer vehicles since EPA won’t have to “reinvent the wheel.”

But if EPA does clear E15 fuel for 2001 to 2006 year vehicles, it would necessitate changes in the current proposed label.

Will consumers understand? An EPA report from 1985 regarding the phase-out of lead in gasoline noted that some consumers continued to misfuel their cars despite the fact that the filler necks on cars designed to use unleaded fuel only were too small for leaded gasoline dispensers.

Costs could be key. Another issue raised by the decision on whether to approve E15 for 2007 and newer cars and light trucks is the cost involved for retailers to make it available to consumers, such as installing new pumps or underground storage tanks to dispense the fuel.

Even Tom Buis, head of Growth Energy, the group that made the E15 request to EPA, admits there’s still work to be done. “We know we have challenges on which we have to move forward,” he said.

While some U.S. government officials predict that E15 will become commercially available on later model vehicles in early 2011, litigation and liability concerns could make that timeline overly optimistic.

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