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Early End to Summer E15 RVP Limit in Many States Helped Offset Supply Shortfall, Limit Price Spikes

September 14, 2017


WASHINGTON - In a typical September, the Environmental Protection Agency's (EPA) onerous summer restriction on selling 15% ethanol blends (E15) would end this weekend. But with Hurricanes Harvey and Irma wreaking havoc on the nation's fuel market, this September has been anything but typical. Fortunately, emergency fuel waivers issued by EPA ended the summer restriction on E15 two weeks early in 38 states, thanks in part to a request by the Renewable Fuels Association to EPA Administrator Scott Pruitt. E15 has helped to offset gasoline supply shortfalls, limit fuel price spikes, and give consumers a higher-octane choice at the pump. Ethanol's ability to extend fuel supplies and dampen price shocks during this chaotic time in the marketplace underscores the need for EPA to eliminate the summer restriction on E15 and allow year-round sales of the fuel nationwide. Since Hurricane Harvey made landfall on Aug. 25, ethanol prices have averaged a 14% discount to gasoline prices (25 cents per gallon). "Being able to offer E15 to my customers throughout the South, Southeast and Mid-Atlantic these past two weeks has been incredibly helpful as retailers scramble to fulfill demand," said Steve Walk, vice president of Business Development for Florida-based Protec Fuel, which supplies ethanol blends to more than 200 retailers. "The Gulf Coast region experienced major damage, with refineries that were knocked out slowly coming back online. There continues to be a shortfall of supply, but thanks to EPA's actions, I have been able to provide E15 to retailers before Sept. 16. That has made a difference in preventing further price increases and ensuring plentiful supply for consumers." EPA issued a waiver on Aug. 26 of certain regulatory requirements in Texas to provide relief to the fuel crisis triggered by Hurricane Harvey. However, that initial fuel waiver did not allow early sales of E15. On Aug. 28, the Renewable Fuels Association asked EPA Administrator Scott Pruitt to expand the scope and geographic coverage of the fuel waivers by relaxing the volatility limits of all finished gasoline blended with ethanol in conventional and reformulated gasoline (RFG) areas nationwide through Sept. 15, to provide a badly needed source of additional lower-cost fuel supplies. Two days later, EPA acted on the request, effectively ending the summer volatility control season two weeks early in 12 states and Washington, D.C., and allowing gasoline blenders and retailers (who meet certain other E15 regulatory requirements) to immediately begin selling E15. Later, EPA added another 26 states to the waiver, expanding approval to 38 states. Beginning Saturday, Sept. 16, consumers in states not covered by the waivers will have unfettered access to E15, thanks to the end of EPA's summer volatility control season. In 2011, EPA approved the use of E15 in 2001 and newer vehicles, but the agency did not allow E15 to benefit from the 1-pound per square inch (psi) Reid Vapor Pressure (RVP) waiver that is available to E10 blends. As a result of this disparity, retailers in conventional gasoline areas (most of the country) would have to secure specialty gasoline blendstocks in order to continue selling E15 in the summer. Such gasoline blendstock is generally unavailable in conventional gasoline areas and would be uneconomical to ship. EPA has jurisdiction over gasoline volatility from June 1–Sept. 15 every year. "While we are glad EPA responded to the requests of RFA to allow early sales of E15, the summer RVP restriction remains as an unnecessary and irrational impediment to rapid expansion of E15 in the marketplace," said RFA President and CEO Bob Dinneen. "RFA's top priority continues to be RVP parity, whether that's through legislative or administrative action. The events of the past few weeks have demonstrated that ethanol generally, and E15 specifically, can help offset gasoline shortfalls resulting from major disruptions in our fuel market. Domestically produced renewable fuels are a strategic asset to our nation, but our regulations must be modernized to allow greater access to that asset when it is most needed," he added.