Oil groups welcome delay of decision on ethanol limit

Oil industry groups welcomed a Nov. 30 decision by the US Environmental Protection Agency to postpone a decision on raising the amount of ethanol that can be blended into gasoline.

Dec 1st, 2009

By OGJ editors
HOUSTON, Dec. 1
-- Oil industry groups welcomed a Nov. 30 decision by the US Environmental Protection Agency to postpone a decision on raising the amount of ethanol that can be blended into gasoline.

EPA told Growth Energy, a biofuels industry association, it would not immediately act on the group’s March request for a waiver raising the ethanol ceiling to 15% from 10%.

The request came amid concerns that the stagnant US fuel market might not be able to absorb ethanol in the rising amounts mandated by Congress.

Automakers and manufacturers of small engines have resisted the increase, fearing engine damage, safety compromises, and warranty complications.

The decision
In a letter to Growth Energy, EPA said incomplete studies indicate fuel, engine, and emissions-control systems in gasoline vehicles made in model years 2001 and later probably can accommodate fuel containing 15% ethanol (E15).

“However, we continue to evaluate the question of component durability when E15 is used over many thousands of miles, and there is an ongoing study being conducted by [the Department of Energy] that will provide critical data on this issue,” EPA said.

DOE expects next August to complete a test of 19 vehicles assessing long-term emissions effects of higher ethanol blends on newer vehicles, EPA said.

DOE has data on two vehicles at present and expects to complete testing of 12 more vehicles by the end of May. EPA thus expects to have much of the data it needs for a decision by mid-June.

“Should the test results remain supportive and provide the necessary basis, we would be in a position to approve E15 for 2001 and newer vehicles in the midyear timeframe,” EPA said, adding that the appearance of potential problems would further delay a decision until all testing is complete.

Industry reaction
The American Petroleum Institute called EPA’s decision “sound” but expressed concern about the agency’s willingness to consider a waiver for part of the vehicle fleet.

“API is actively supporting the studies that are currently under way,” the association said in a statement.

While ethanol and other renewable fuels should help meet US energy demand, API said, “it’s important that the short and long-term impacts of increasing the amount of ethanol blended into motor fuels be evaluated on the full vehicle fleet before a waiver decision is made.”

National Petrochemical & Refining Association Pres. Charles Drevna said his group is “pleased” by EPA’s postponement of the decision.

“EPA correctly recognizes that there is more study and comprehensive testing to be done to ensure that higher ethanol blends will be safe for consumers and not threaten the reliability of their fuels or operation of their vehicles, engines, and outdoor equipment,” Drevna said.

The ethanol industry took a different view.

“This delay threatens to paralyze the continued evolution of America’s ethanol industry,” said Bob Dinneen, president and chief executive officer of the Renewable Fuels Association. He called for immediate approval of intermediate ethanol blends, such as 12%.

Dinneen called EPA’s apparent focus on 2001 and newer vehicles “another worrisome development.”

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