EPA Approves E15
The EPA approves E15 for 2001 and newer vehicles giving motorists more choice at the pump.
Source: Farm Futures Article by Jacqui Fatka
Today the Environmental Protection Agency approved the use of E15 in vehicles model years 2001 to 2006, an extended amount from the previously approved decision of 2007 and newer made in October.
With 2001 and newer cars and pickups included, EPA has approved the use of E15 for 62% of vehicles on the road today according to car industry data.
The decision is in response to a regulatory petition filed in March 2009 by Growth Energy. The ethanol industry has been unhappy with EPA's decision to not approve the blend for all vehicles. Growth Energy chief executive officer Tom Buis stated with engine and emissions systems testing on cars 2001 through 2010 complete – and showing no issues with using E15 as a fuel – EPA’s approval of E15 should be extended to older vehicles. The EPA is currently not doing any additional testing on older vehicles at this time.
The announcement received praise from the corn and ethanol industry, although many other interests voiced opposition to the EPA's decision.
Robb MacKie, president and chief executive officer at the American Bakers Association, said the decision will further increase volatility in the grain markets. "This could hasten the reduction in wheat acres and raise Americans’ food bills. U.S. cropland is already stretched to its limit. Increasing the blend has the potential to further impact commodity stocks and ultimately food prices. The grain markets are currently experiencing near record volatility and prices have edged closer to the record levels of 2008.”
Livestock and dairy entities stated the effects will be felt in food prices as the industry passes on higher feed costs.
“E15 may be good for ethanol producers and corn farmers, but it is clearly detrimental to all other interested parties,” said Bill Roenigk, senior vice president and chief economist for National Chicken Council. “To the extent EPA and the ethanol industry actually manage to force more ethanol into the nation’s motor gasoline, they will put even more pressure on the already very tight supply of corn,” he added.
In a press call hosted by Growth Energy, Todd Becker, chief executive officer of Green Plains Renewable Energy, noted that this year's high quality corn crop and improved ethanol plant efficiencies may actually allow the ethanol industry to use less corn while producing the same amount of ethanol. He estimates carryover stocks may actually increase as much as 150 million bushels because of the improvements. USDA current calculates production using 2.7 gallons of ethanol per bushel of corn, whereas the industry average may increase to 2.8 this year.
Both the oil industry and engine manufacturers have filed lawsuits against EPA over the approval of E15.
Sen. Chuck Grassley, R-Iowa, said he has criticized EPA Administrator Lisa Jackson for the time it has taken for EPA to grant the approval, and also the partial approvals. "I’ve been frustrated with the amount of time it’s taken the EPA to reach these decisions, and I’d still like to see a waiver for E15 use in all vehicles, but I also appreciate that the EPA Administrator has made certain to base the decisions on sound science, which puts the waiver decision in a very strong position against court challenges from opponents,” Grassley said.
The EPA announcement is not expected to significantly increase ethanol demand in the near term, as the lawsuits play out and gas stations figure out how to implement the voluntary increases. One analyst projected it could take as long as three to five years for market penetration.
Kent Satrang, chief executive officer and general manager of Petro Serve USA, shared that he will offer E15 as soon as possible at eight of his 20 retail stations in North Dakota. The eight stations already have blender pumps which makes for a smooth transition to allow consumers the ability to choose the higher blends.
"What were finding is with choice at the pump, it puts change in the consumer's pocket," Satrang said. Blender pumps provide consumers the option to choose what to put into their tanks.
A statement from the Nebraska Corn Board noted that additional regulatory loose ends and certifications still need to be completed, but Tim Scheer, member of the board, is "hoping to see E15 later this year at stations across Nebraska. "
In the meantime, the Nebraska Corn Board continues to offer grants to support fueling station owners who would like to install blender pumps and start offering higher ethanol blends to motorists who drive flex fuel vehicles.
“Blender pumps allow station owners to offer more fuel options for motorists, from E10 for regular vehicles to E30 and E85 for flex fuel vehicles,” said Kelly Brunkhorst, director of research for the Nebraska Corn Board. “Blender pumps will also allow station owners to easily offer both E10 and E15 fuel options when the time is right to do so.”