Expanding E15 Availability Is Only a Step Toward Best Use of Biofuels

June 6, 2019

At long last, after years of appeals from biofuel interests, clean air advocates and rural Americans, EPA has lifted the summertime ban on the sale of 15-percent ethanol-blended gasoline (E15). The rule lifting the selective, if not scientifically questionable, prohibition is now in place, having become effective June 1.

It is a move long called for by Solutions from the Land over the past year, and for years back through SfL’s clean energy platform, 25x’25. Expanding ethanol sales is critical to a farm sector that has been hammered by a 16-percent fall in net farm income in 2018, the lowest real-dollar level in a decade. The sector is at risk of even greater economic peril this year, stemming from unprecedentedly widespread flooding and trade disputes with China and others that have put the economic well-being of U.S. farmers and ranchers – even rural America – at peril.

Summertime availability could well more than double the sales of E15, from 300 million gallons in 2018 to 700 million gallons or more this year. That number and the economic benefits that increased availability can bring to rural America are expected by ethanol advocates to grow significantly over the next three to five years.

But let’s be clear. Pushing up a bit the amount of ethanol that can be blended into the nation’s gasoline supply is not an end-all resolution to the problems made fraught by our nation’s reliance on petroleum-based fuels. It’s a good first step. The role that biofuels can – and should – play in America’s transportation fuels is still in its relatively early stages. And policies that enable and boost that cleaner, less-expensive option must be further developed and implemented.

But first, the E15 boost will need to overcome the legal challenges likely to be brought by the nation’s gasoline refiners, who will claim the Trump administration did not have the legal authority to lift the ban and expand ethanol blending without congressional authorization. The oil industry will continue to do what it has done for years – take any step necessary to protect its massive market share. Look once again for boating groups and small, gas-powered appliance manufacturers to again raise legal issues over the increased availability of E15 and the potential for the higher blend to damage small engines – think boat engines or lawn mowers – despite prominent warning labels and similar precautions.

Then there remains the continued rush on “small refinery” financial-hardship waivers that EPA has been granting in unprecedented numbers in recent years, costing the ethanol industry at least $2.25 billion in revenue. EPA last year retroactively issued nearly 50 exemptions from 2016 and 2017 to Renewable Fuel Standard (RFS) obligations. Refineries have requested another 40 waivers from 2018 RFS obligations, despite many of them coming from facilities owned by oil industry giants like Chevron and Exxon-Mobil Corp., the latter of which announced quarterly profits of $8.65 billion on Feb. 1. Only a handful of waivers were granted by EPA throughout the entire Obama administration.

Efforts at major reforms to the waiver process by EPA got bogged down – administration officials were under the June 1 deadline to get the E15 availability rule out in time for high driving season, leaving those questions still to be answered. And still more questions remain over requirements that are likely to be imposed on storage and pumping equipment.

So, while extending the availability of E15 year-round is welcome, it is merely the first step in a chain of policy improvements that must come for this nation to gain the full benefits of biofuels, including lower fuels costs and reduced emissions.

What still needs to be done is the development of more efficient engines that can operate using higher ethanol-blend fuels. In its 2019 Annual Energy Outlook issued in January, the DOE’s Energy Information Administration offered projections that make clear the importance of significantly increasing ethanol blends into the nation’s transportation fuel over the next several decades. With increased fuel prices and travel mileage predicted over the next few decades, a critical effort underway to bring to the market less expensive and cleaner ethanol blends must be fully supported. Research from DOE’s National Labs shows that higher-octane, midlevel ethanol blends of 25 to 30 percent, paired with optimized engines, “will improve engine efficiency and reduce greenhouse gas emissions, yet cost less than today’s regular gasoline.”

On the road, retailers agree that cars will stop at E15 stations and add to their volume if customers see a lower price on the sign. Higher ethanol blends are unique products that will expand options – and future business – through customer loyalty, price and results. And those in the industry say that updating stations today to carry tomorrow’s fuels may be easier and more affordable than ever.

It’s important to remind policy makers that the EPA’s move to expand E15 is not the final prize. They must be made to understand that expanded E15 sales now pave the way for selling higher-octane fuels needed for the vehicles of tomorrow.

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