E15 and E85 Ethanol News: January 17, 2013

An earlier Biofuel Policy Watch post described the recent actions taken by the U.S. EPA to approve the blending of ethanol at levels of up to 15% in the nation’s gasoline supplies (“E15” ethanol), and some of the public policy issues that have come with those actions. In this post, I’ll report on news items and other developments during the last few months of 2012 and early 2013 that are relevant to the use and market acceptance of E15 and other higher blends of ethanol such as E85. Look for subsequent updates on other developments in the weeks to come.

E15 Federal Developments

Dismissal of anti-E15 lawsuit upheld. On January 15, 2013, full U.S. Court of Appeals for the District of Columbia Circuit ruled that it would not overturn the previous decision by a 3-judge panel of the Court that dismissed a challenge to EPA’s approval of the sale of E15 ethanol blends. As reported in an earlier post on Biofuel Policy Watch, in October 2011 a coalition of industry groups led by the Grocery Manufacturers Association, which included the American Petroleum Institute, the American Fuel and Petroleum Manufacturers, among others, filed a lawsuit against EPA, challenging EPA’s rulings allowing E15 to be sold. In August 2012, a 3-judge panel of the Appeals Court ruled in EPA’s favor and rejected this lawsuit, in a decision based on the finding that the petitioners did not have standing to bring the lawsuit (i.e., that the E15 waiver has not caused demonstrable harm to the petitioners). Six of the seven Appeals Court judges voted to deny the petitioners a rehearing, thus dismissing the suit, and the lone dissenter was the same judge who dissented in the August decision. Although this is widely viewed as a victory for the biofuels industry, this ruling still leaves the E15 decision potentially vulnerable to a future challenge by an entity that can better demonstrate that the E15 waiver has caused harm.

E15 Developments in the States 

E15 Adoption in Midwestern states
. Many states have laws governing the sale, storage and use of gasoline and ethanol/gasoline blends, and some of these laws may impact the ability to sell E15. To my knowledge, as of this writing, E15 is being sold in Kansas, Nebraska, Iowa, South Dakota and possibly Illinois. A New York Times article in July 2012 reported on a gas station in Kansas that was one of the first to begin offering E15. In October 2012, a gas station in Lexington, Nebraska reportedly became the first station in that state to begin offering E15 ethanol. This station was a recipient of a blender pump grant from the Nebraska Corn Board. Linn Co-op Oil Co. has reportedly become the first retailer in the state of Iowa to sell E15, with a second Iowa retail station opened in late 2012 in Federicksburg, operated by Fredericksburg Coop. It has also been reported by the Iowa Renewable Fuels Association that Iowans have successfully driven more than 125,000 miles on E15 since it became available this fall. The Association has also said that drivers in that state could have saved $69 million in 2012 if they switched to E15.

California approval for E15 seems less certain or imminent. In October 2012, the California Advanced Energy Coalition (CAEC) proposed that the California Air Resources Board (ARB) amend its fuel regulations to accommodate E15 blends. The group, a coalition of advanced biofuels developers, suggested that ARB implement an emergency update of its compliance model to include levels of ethanol up to 15%, to save consumers at the pump, since (at that time) ethanol was selling at more than a dollar per gallon below the price of gasoline. However, more recent reports suggest it might take some time before California approves E15. California ARB has reportedly responded to an inquiry from the American Motorcyclist Association (according to an Association press release), that “if ARB chooses to allow E15 as a transportation fuel [in California], it would take several years to complete the vehicle testing and rule development necessary to introduce a new transportation fuel into California’s market.” The motorcycle association is concerned that the EPA-approved model misfueling mitigation plan is not sufficient to prevent unauthorized use of E15 in motorcycle engines. However, ARB’s response was criticized by a spokesperson for the CAEC. In this more recent statement, the Coalition said that there’s no reason E15 approval in California should take so long, in view of the extensive testing performed by EPA and the fact that the Coalition has had ongoing conversations with ARB about E15 for over a year.

Proposed anti-E15 legislation in Maine. A possible legislative proposal in Maine is drawing industry concern. The state’s Department of Environmental Protection is reportedly preparing to propose a bill that would ban the sale of gasoline containing more than 10% ethanol if at least two other New England states adopt a similar ban. The idea appears to have arisen within DEP, possibly in response to the November 2012 statement by the Automobile Association of America (AAA) calling for a halt to sales of E15, but according to the news report, the possible ban has the support of the Maine Energy Marketers Association. DEP has not yet finalized language for this bill, but the Renewable Fuels Association has already spoken out against the proposed ban.

Florida Renewable Fuel Standard Act. A bill has been filed in the Florida state legislature that would repeal that state’s Renewable Fuel Standard Act and remove the requirement that ethanol be blended into all gasoline sold in Florida. A similar bill failed to be enacted in 2011.

Other E15 Developments 

E15 Pump Restrictions. In other news attributed to the American Motorcyclist Association, it is reported that the EPA has signaled that it would abandon its requirement of a mandated 4-gallon minimum purchase from gasoline pumps capable of dispensing E15. This requirement was instituted to dilute out any residual E15 remaining in the fuel hose when the next customer purchases E10 for a vehicle not authorized to use E15. According to the Association, EPA will instead require more explicit labeling about E15 restrictions on those blender pumps that dispense both E10 and E15, and will also require stations that sell E15 to have a dedicated E10 pump for motorcycles and other vehicles not approved for E15.

Automaker Stances on E15. The Iowa Renewable Fuels Association recently wrote to the heads of 12 auto manufacturers asking them to follow the trend set by Ford and GM and recommend E15 for use in their new models.

E85 News

State Efforts to Promote E85 Use. It has been reported that a number of states and state corn associations in the U.S. Midwest have begun programs to promote the increased use of higher ethanol blends such as E85. The states of Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota and South Dakota all have programs to help fund the installation of fuel pumps, assist retailers to convert multiple locations, and to help cover the cost of signage highlighting ethanol options. The associations of corn growers and ethanol producers in these states are also partnering with national groups such as NASCAR to educate consumers about ethanol options. The report also stated that only 3,000 U.S. service stations presently offer E85 fuel for flex-fuel vehicles and few offer the choice of E15. In a separate development, RTC Fuels LLC has received a $1.35 million grant from the California Energy Commission to install E85 dispensing equipment at 19 existing gas stations around the state, and to gather operational data on their use.

E85 Availability in Nebraska. There are reportedly now 80 flex-fuel pumps in the state of Nebraska that are capable of dispensing E85 and other ethanol blends. 

Previous Biofuel Policy Watch posts on ethanol policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels


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