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Making a Silk Purse

October 18, 2010


It is no secret that the ethanol industry is frustrated with the Environmental Protection Agency's (EPA) segmented approach to expanding the market for ethanol.  On numerous occasions, the RFA has noted that EPA is ignoring credible scientific data that demonstrates the efficacy of E15 in all light duty cars and trucks. Based upon Clean Air Act requirements, EPA is to consider all scientific evidence when evaluating new fuels.  In this case, however, EPA completely ignored credible data submitted by RFA that demonstrated the efficacy of E15 in older vehicles.  Ricardo, Inc., an internationally recognized automotive engineering firm used EPA's own methodology to evaluate the likely effects of using E15 in vehicles model year (MY) 2000 and older.  According to its analysis, "...the adoption and use of E15 in the motor vehicle fleet from the studied model years should not adversely affect the vehicles or cause them to perform in a sub-optimal manner when compared with their performance when using the E10 blend that is currently available." It is previously unheard of for EPA to deny a waiver request for vehicles that are beyond their EPA-determined useful life, as all MY2000 and older vehicles will be on January 1, 2011. Alas, c'est la vie. It is now up to the industry to make a silk purse out of this sow's ear.  We have introduced new fuels in this country before and the pathway to doing so is clear.  It is a complicated process and one that will not happen overnight.  Fortunately, the RFA has already begun this process. Top of mind is the E15 label EPA proposed yesterday.  As dictated by statute, EPA must solicit comment on the proposed label for 60 days before it can issue a final label.  The RFA will certainly have some comments.  Since EPA has chosen the most confusing of options for E15 implementation, ensuring the label is clear, factual and non-threatening will be critical.  The industry has worked for a long time to remove confusing and alarming labels from pumps, and the RFA will engage vigorously with EPA to create a label that does not unnecessarily deter motorists from choosing E15.  The label is meant to instruct consumers on how to the use the fuel, not frighten them away from doing so. As you can see from the image below, EPA is proposing a warning to consumers about the dangers of using E15 in unapproved vehicles, but it has no data to support such a claim.  These and other concerns with color and tone will need to be addressed. Perhaps even more importantly, highly technical issues must be addressed to allow E15 to be sold in all 50 states.  As EPA has rightly observed, "It's also important to remember that there are a number of additional steps that must be completed – many of which are not under EPA or DOE control – to allow the sale and distribution of E-15. These include but are not limited to: testing on dispensing equipment; changes to state laws to allow for the use of E15; and completion of the fuels registration process by industry." Where action could have been taken on these issues prior to any decision by EPA, the RFA has begun to act to pave the way for E15 in the marketplace – both with the federal government and equally importantly with individual state regulators. First, working with Growth Energy, the RFA has begun the health effects testing and fuel registration process that must be conducted for any new fuel.  While the technical name of the test sounds alarming, it is not.  This testing is required to determine if any new chemical species in evaporative and combustion emissions are created as a result of increased ethanol content.  We do not believe this will be the case and early testing is confirming that belief. Safety concerns with any fuel are paramount, and the same holds true with E15.  Through its Ethanol Emergency Response Coalition (EERC), the RFA is researching the efficacy of current firefighting tools and techniques to address any E15-related incidents.  Additionally, RFA is working with local fire marshals to ensure existing fueling infrastructure can operate with E15 blends. Yet another key issue will be certifying the octane rating of E15 blends.  Pure ethanol has an octane rating upwards of 109, compared to a standard gallon of unleaded gasoline octane possessing a rating of 87.  Octane is an important component in fuel to ensure it ignites and burns properly in the engine.  The Federal Trade Commission (FTC) and virtually all state fuel laws require a fuel's octane to be certified.  Working through ASTM, the standard-setting body for fuels, the RFA is developing the data to certify E15's octane rating. There are other I's that must be dotted as well, including additional fuel specifications from ASTM, EPA's detergent certifications (EPA requires all gasoline to contain a minimum number of detergents that reduce hydrocarbon build up in engines), and not insignificantly current automaker warranties that only extend coverage to E10. On a separate note, but still related, the RFA is also working with fuel retailers to address the concerns they have created by EPA's approach.  Namely, the RFA is working with the Petroleum Marketers' Association of America, the Society of Independent Gasoline Marketers of America, the National Association of Convenience Stores, and others to support the Renewable Fuels Marketing Act.  This bill is a common sense approach to deal with liability concerns raised by retailers. At first blush, this to-do list may seem daunting.  But the RFA has been engaged in many of these activities for months, recognizing that it takes more than a press release and an EPA announcement to sell ethanol.  While disappointment with EPA's decision will linger, a greater motivator is the need to address remaining barriers to E15 introduction and the will to achieve the goals of the Renewable Fuels Standard. As it has done for nearly 30 years, the RFA continues to tackle the technical, but not necessarily sexy, issues that are truly the catalysts for greater ethanol use.