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E15: The Great Debate

An Issue That Defies Clear Answers

Larry Jewett - June 20, 2013 10:00 AM

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Warning stickers about ethanol content can appear on gasoline pumps. There are 15 states that don't require this, so don't assume that the gas is ethanol free if you travel to another state and there is no sticker.

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This chart from the U.S. Energy Information Administration shows how the ethanol content increased through the period from 2009-2011. Already near the 10 percent mark by this point, it is likely higher, due in part to E85 fuel, but could go even higher with the arrival of E15.

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This is the sticker found on the few E15 pumps currently being used. It is the only safeguard against misfueling and puts the responsibility on the consumer.

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American Automobile Association (AAA) warned its members against the use of E15, citing automaker concerns. The agency has been a vigilant watchdog on the issue.

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Companies such as Justice Brothers make fuel additives that can combat the effects of ethanol. Regular use would be helpful, but it’s not a perfect solution for the E15 dilemma.

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Some stations can offer “pure” gasoline for limited use. In Florida, a bill has passed to allow this type of gasoline to be sold without limit.

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There are accusations, lawsuits and legislative measures flying around.

It’s the kind of fight that gets dirty quickly, thanks to misinformation, misleading information and intent to strengthen one position by weakening another.

While the average motorist will be content to let the political parties and special interests hash it out on most occasions, this one could bear watching if you care about the fuel you are putting in your car, whether it be the collector car or the daily driver.

The center of the storm is the next generation of oxygenated fuels that could be coming to market across the nation. It is called “E15” and it is already being sold at limited outlets in three states. Critics say it is bad for your car if your car is more than a few years old. Supporters say the contentions are scare tactics. Naturally, each side has testing and experts to support their position. It comes down to whom you believe.

“It’s hard to understand what’s going on because there is so much going on,” said Stuart Gosswein, senior director of Federal Government Affairs for the Specialty Equipment Market Association (SEMA). “The ethanol industry petitioned the EPA to act to make E15 available, even though it’s OK for some uses and not for others. The thinking is that putting a sticker on the pump will be enough of a protection and a way to inform the consumer, but there hasn’t been any kind of education for the consumer. Everyone is kind of stumbling through it and the question keeps getting asked about the rationale behind making E15 available now.”

At issue is the amount of ethanol in fuel and E15 would represent an increase in it. The fuels currently pumped can contain up to 10 percent ethanol and 90 percent gasoline. E10, as it is called, is a low level blend that is considered to be “substantially similar” to gasoline without the presence of ethanol. It wasn’t that long ago that the very presence of ethanol in gasoline was a topic for discussion.

 

Arrival of ethanol

The incorporation of ethanol into gasoline came about with the 1990 amendments to the Clean Air Act, which was passed in 1970. The original bill more than 40 years ago targeted air pollution, especially from smokestack industries and the automobile, especially in bigger cities, where air quality was diminished by exhaust. With the Clean Air Act Amendments of 1990, the car once again came under increased scrutiny. Stringent tailpipe emission standards were coupled with efforts to reduce the volatility of fuels being sold. The new rules also called for the production of higher levels of alcohol-based oxygenated fuels.

As the 21st century came into being, environmental concerns continued. The Energy Policy Act of 2005 provided a key player in today’s discussion with the creation of the Renewable Fuel Standard (RFS). The Renewable Fuel Standard required transportation fuel sold in the United States to contain a “minimum volume of renewable fuels.” The effect was greatly enhanced by provisions within the Energy Independence and Security Act of 2007, which sought, as one of its goals, to reduce the country’s dependence on foreign oil.

Since one of the tenets of the RFS program is a requirement to increase the amounts of renewable fuels in increasing amounts, the 10 percent was in jeopardy of being increased from the start. When you add in the fact that motorists are using far less fuel than anticipated, there comes a crisis. To be in compliance, more of the conventional biofuel (ethanol) has to be added to less of the base stock (gasoline). It becomes a numbers game with perilous consequences to the internal combustion engine and the American consumer.

“With Congress passing the Energy Independence and Security Act and expanding the amount of biofuels that have to be used, it creates a flashpoint. Every year, the biofuels blend is going up and there’s a point where you can’t meet the target. The Renewable Fuel Standard used to be a secondary issue, but it is quickly becoming a threshold issue,” said Gosswein.

Section 202 of the EISA states ‘‘Not later than one year after the date of enactment of this sentence, the Administrator shall revise the regulations under this paragraph to ensure that transportation fuel sold or introduced into commerce in the United States (except in noncontiguous States or territories), on an annual average basis, contains at least the applicable volume of renewable fuel, advanced biofuel, cellulosic biofuel, and biomass-based diesel.”

The applicable volume of renewable fuel for the calendar years 2007 through 2022 shall be determined in accordance with the following table:

 

Year/Barrels (billions)

2007 / 4.7

2008 / 9.0

2009 / 11.1

2010 / 12.95

2011 / 13.95

2012 / 15.2

2013 / 16.55

2014 / 18.15

2015 / 20.5

2016 / 22.25

2017 / 24.0

2018 / 26.0

2019 / 28.0

2020 / 30.0

2021 / 33.0

2022 / 36.0

 

As you can see, the increase steadily climbs to an anticipated 36 billion barrels within 10 years. Once again, considering the reduction in fuel use, the numbers become unbalanced.

The ethanol industry was probably among the first to sense the trend. Production of corn for use in fuels was stepped up at the expense of producing the grain for food consumption. The re-direction of resources has had an adverse effect on agriculture in that livestock feed has been compromised and the laws of supply and demand take over. The available feed comes with a higher price, which is inevitably passed to the consumer.

 

Testing

According to Gosswein, the EPA was approached by the ethanol interests in 2009 for a waiver to sell E15, which would require extensive testing before allowing a product for use. The testing and methodology have become one of the latest targets in the battle over E15.

In January 2013, the American Petroleum Institute called for the EPA to pull back the E15 that was available for sale and consumer use in three states. The EPA had granted the sale of the fuel with certain conditions, though there was no requirement for educating consumers about the new fuel and its dangers.

“In 2010 and 2011, EPA gave the green light to use E15 in model year 2001 and later cars and some other vehicles. EPA’s action was irresponsible,” said API Director of Downstream and Industry Operations Bob Greco. “EPA knew E15 vehicle testing was ongoing but decided not to wait for the results. Why did EPA move forward prematurely? Part of the answer may be the need to raise the permissible concentration level of ethanol so that greater volumes could be used, as required by the federal Renewable Fuel Standard.”

The Coordinating Research Council (an organization created and supported by the oil and auto industries) completed testing in May 2012. “That research demonstrated that E15 could damage valve and valve seat engine parts in some of the tested vehicles, which include a number of common brands.”

Additional testing by the CRC was completed earlier this year. “They conclude that putting E15 in America’s gas tanks could damage millions of vehicles and put motorist safety at risk,” added Greco.

 

Findings questioned

The CRC report found an elevated incidence of fuel pump failures, fuel system component swelling and impairment of fuel measurement systems. The report concludes E15 could cause erratic and misleading fuel gauge readings and faulty engine malfunction lights. The effects could include component breakage and vehicle breakdowns. The problems did not occur with fuels containing no ethanol and 10 percent ethanol.

The Renewable Fuels Association took immediate exception to the findings of the American Petroleum Institute and fired back on the same day. Bob Dineen, President and CEO of the Renewable Fuels Association said the CRC testing was tainted. “API has absolutely no credibility when it comes to talking about E15,” he said. “That point has never been more clear than in this new study where they ‘cooked the books’ by using an aggressive fuel mix to try and force engine damage. This isn’t real testing and it certainly isn’t real life. E15 will not be stopped by feet dragging and forecasts of fictional faults.”

Obviously, each of these players has somewhat of a vested interest in the issue and subject to skepticism of bias. While you may be able to cast aspersions onto any opinion, it is interesting to note what the manufacturers have to say about the matter.

The EPA released E15 for sale with the stipulation that it is not to be used in vehicles that were manufactured before 2001. Unfortunately, there is nothing in place to prevent that from happening, whether through ignorance or accidentally.

 

Automakers’ reaction

A number of auto manufacturers, domestic and foreign, have spoken out on the consequences of use. In July 2011, Wisconsin Congressman F. James Sensenbrenner Jr. sent a letter to EPA Administrator Lisa Jackson that spelled out his concerns. “On June 1, 2011, I wrote to 14 auto manufacturers and asked three questions: 1) Will E15 damage engines of model year 2001 or later? 2) Will your warranties cover damage from E15? And 3) Will E15 negatively effect fuel efficiency?

“Engine manufacturers have been nearly unanimous in their beliefs that E15 will damage engines, void warranties and reduce fuel efficiency.”

Sensenbrenner went on to highlight quotes from several manufacturers including Ford and Chrysler.

Ford: Ford does not support the introduction of E15 into the marketplace for legacy fleet. Fuel not approved in the owner’s manual is considered misfueling and any damage resulting from misfueling is not covered by the warranty.

Chrysler: We are not confident that our vehicles will not be damaged from the use of E15. The warranty information provided to our customers specifically notes that use of the blends beyond E10 will void the warranty.

Since Sensenbrenner’s letter, there have been numerous news reports that have echoed the findings and concerns. Viewed by some to be “sky is falling” criticism of E15 without conclusive testing, organizations such as SEMA and the American Automobile Association (AAA) have been watching the matter closely as well.

 

Lawsuits and legislative action

Almost immediately after the E15 was allowed, the court battles started. The EPA’s authority was challenged in court, which was rejected on the basis that the organizations bringing the suit, including trade associations representing manufacturers, petroleum and the food industry, lacked standing to bring the suit, a decision that was appealed.

In August, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit dismissed the suit and upheld the lack of standing. The matter has been brought to the Supreme Court. In February 2013, the groups banded together and filed a petition of appeal. “We’ve filed this petition because we believe the D.C. Circuit incorrectly concluded that none of the 17 petitioners had standing to challenge the E15 partial waivers,” said Greco of API.

“Had EPA stayed within its statutory authority and followed proper procedures, it would have waited until ongoing E15 testing on engines and fuel systems was completed before allowing the use of E15. Then, it would have discovered that E15 is not safe for millions of vehicles now on the road.

“Although we hope the court will resolve the E15 problem, we also believe our experience here represents only one of many underlying problems with the Renewable Fuel Standard, so we are calling on Congress to repeal the program.”

There have been a number of bills proposed on both sides of the aisle that deal with E15 and the bigger issue of the Renewable Fuel Standard. Days before the announcement of the Supreme Court petition, legislation was introduced into the U.S. Senate prohibiting the introduction of gasoline containing over 10 percent ethanol into the marketplace.

Introduced by Mississippi Senator Roger Wicker, S. 344 received two readings and was sent to the Senate Committee on Environment and Public Works. In April, Virginia Representative Bob Goodlatte brought forth H.R. 1462, which seeks the same purpose as the Senate measure, but also asks to amend certain requirements of the Clean Air Act with respect to the renewable fuel program. The matter carries 28 co-sponsors and has been sent to the House Committee on Energy and Power. The “Phantom Fuel Reform Act of 2013” (H.R. 550) is calling for the renewable fuel program to be amended to require the cellulosic biofuel requirement to be based on actual production. A similar bill was introduced in the Senate (S. 251).

An even bigger measure came to light by Goodlatte with the introduction of H.R. 1461. This measure is called the “RFS Reform Act and RFS Elimination Act”. In his remarks on April 10, Goodlatte addressed the issue (Text supplied by the Congressional Record).

“Mr. Speaker, I have long been a critic of the Renewable Fuel Standard and we must act now to fix this broken policy. While the livestock industry has been witnessing the effects of the RFS mandate for several years, the drought last year highlighted for many the extreme reach of the RFS throughout our economy. But even before the drought, by diverting feed stocks to fuel there have been diminished corn supplies for livestock and food producers. Tightening supplies have driven up the price of corn. The higher cost for corn is passed on to livestock and food producers. In turn, consumers see that price reflected in the price of food on the grocery store shelves and restaurants.

“This year, the U.S. is expected to hit the blend wall – where the ethanol mandate will require more ethanol be produced than can be safely blended into gasoline. In order to address the blend wall by reducing the RFS mandate, EPA is working to push E15. EPA has granted a partial waiver to allow E15 blends for model cars 2001 and newer, despite the fact that a study from the Coordinating Research Council, commissioned by U.S. automakers and oil companies, found that 25 percent of cars approved by the EPA to run on E15 experienced engine damage – and even failure. The EPA should not be promoting fuel that is unsafe on the roadways just to meet a mandate.

“EPA administrators from both parties have constantly refused to use the flexibility granted to them by law to alter the RFS, so Congress must act.”

Goodlatte points out that, while he believes the RFS should be eliminated completely, it may not happen yet, but the policy is broken and needs fixed at best.

 

Issues with E15

SEMA has been paying close attention to the issue from the start. SEMA is a supporter of alternative fuels and the reduction of the nation’s dependency on foreign oil, but also stands guard against potentially unintentional harm to the enthusiast.

“Ethanol absorbs water and that leads to corrosion,” said Gosswein, speaking for SEMA’s position. “There are a great number of vehicles on the road that have materials that can’t combat the effects of ethanol. Consumers must be educated about fuel, fuel additives and extra expenses. We have done a lot of technical consultations. E15 burns hotter than E10.”

When given proper advance notice, manufacturers are capable of producing vehicles that can deal with the latest twists and turns in the fueling conundrum. Flex fuel vehicles can handle the E15 with ease, but the modern technology isn’t in every driveway. With consumers keeping their cars an average of 11 years or more, the number of consumers affected by change increases.

In their position paper on the matter, SEMA states that ethanol “increases water formation which can then create formic acid. It can corrode metals, plastics and rubber, especially over a period of time when the vehicle is not used.”

As mentioned, there are few safeguards to prevent a consumer from misfueling a vehicle. According to SEMA, there are an estimated 74 million pre-2001 vehicles in the marketplace that may be misfueled with E15 (if it were available nationwide). The number obviously does not include the number of boats, lawnmowers, handheld equipment, etc. that wasn’t designed to receive this fuel. If misfueled, the lifespan of this equipment can be dramatically reduced and owners could face equipment breakdowns. Although motorists could add anti-corrosion additives every time they purchased gas, it would be expensive, burdensome and require consumer education.

 

At the pump

In June 2011, the EPA issued a rule requiring all gas stations dispensing E15 to place an orange and black sticker on the pumps. SEMA contends that a gas pump label cautioning motorists not to misfuel their older vehicles is an inappropriate response to the threat of damage and injury. The EPA is putting the onus on the vehicle owner to understand the difference between E10 and E15. Misfuelling will occur, whether by mistake, because regular gasoline is not available, or for some other reason. Gas stations, automakers, parts manufacturers etc. would not be granted immunity from lawsuits if a consumer alleges a problem from E15.

There are currently 15 states that do not require an ethanol label on their pumps. E10 labeling rules are subject to state, not federal, regulation. Despite the EPA “mandate” for the orange and black sticker, six of the 17 registered sellers of E15 were found to have neglected to put the sticker on the pump.

The presence of flex fuel vehicles should be part of the solution but is actually part of the problem. Many consumers who own flex fuel vehicles will opt to purchase the E10 fuel instead of E85 where offered. The rationale behind the choice becomes price point or, in many cases, E85 is simply not offered. There are nearly 10 million flex-fuel vehicles on the road, yet only three percent of the gas stations in the country offer E85. Lack of E85 sales is actually seen as a contributing factor in the drive for E15 sales.

Finally, there’s the matter of blender pumps. For the stations that use that type of dispensing equipment, the EPA has made it illegal to dispense less than four gallons of E10 after someone has used the E15. The residue left in the system could cause damage for the subsequent customer. This means it is illegal for consumers to fill a gas can or re-fuel a motorcycle after someone before them has used E15, even if they have no knowledge of the previous customer’s transaction.

“This is a primary issue that resonates among hobbyists for a number of reasons,” concludes Gosswein. “We hear it loud and clear. They understand that there could be a problem and it’s not a knee jerk reaction. They can talk and understand the technical side of it. They can let their voice be heard by contacting their legislators and making those that aren’t aware understand their concerns.”

 

The future

Developments will occur, perhaps taking years. Opponents of E15 want more testing by independent entities such as the National Academy of Sciences. Supporters want to keep the momentum moving, though having 17 outlets in three states means it will take a long time to get the program moving in a significant way.

While the increase in ethanol content is the direction of the EPA, there have been some areas moving in the other direction. House Bill 4001 passed in Florida that would eliminate the requirement that all gasoline offered for sale in the state of Florida contain a percentage of ethanol. It is awaiting the governor’s signature into law.

On the other hand, a bill in the Illinois General Assembly sought to encourage the sale of E15. The measure, H.B. 3369, would allow the state’s Department of Commerce and Economic Opportunity to provide information to gas stations to encourage the stations to offer E15 as an option for customers. The measure is before the rule committee.

There is no quick and easy answer in the great debate about E15. More information will be forthcoming. Courts and legislatures will do their jobs and the eventual outcome is clearly uncertain. It’s a matter that bears watching for the good of you and your car.

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