EPA's E15 waiver: Tear down the blend wall, catalyze cellulosic industry development

By Ron Kotrba | October 14, 2010

For what seems like an eternity now, ethanol groups have been pushing hard for U.S. EPA to authorize E15, a blend of 15 percent ethanol, for use as a gasoline motor fuel.

When I was senior writer for Ethanol Producer Magazine nearly two years ago, I followed this issue pretty closely. Knowing the potential liabilities OEMs could face in warranty costs if extensive testing isn’t completed, documented and validated, I have always been a proponent in supporting E15 but also making sure rigorous testing is completed. Perhaps this is because of my experience working as an advanced engineering lab technician for an OEM supplier in my former life.

So when EPA announced its conditional E15 waiver yesterday, stating it approves E15 for 2007 and newer vehicles, I thought it was a good first step in what could otherwise be a long, drawn out waiting period. The agency expects the 2001-2007 approval later this year or next.

Imagine you were going to get a 10 percent raise in January. The previous June, however, you are tasked with additional responsibilities and your boss gives you the option to take a 5 percent raise now, and in January instead of getting a 10 percent raise, you’ll get another 5 percent raise. Who wouldn’t take the 5 percent raise in June, and in January, versus the 10 percent raise in January? It would mean that you are reaping the benefit of half the January raise six months early.

Would ethanol advocates, who have been incessantly complaining about EPA dragging its feet on approving ethanol blends higher than 10 percent, rather have continued waiting impatiently for EPA’s final unconditional E15 waiver before reaping any of the rewards?

I say this because the Renewable Fuels Association’s Bob Dinneen has gone on record saying, “EPA’s scientifically unjustified bifurcation of the U.S. car market will do little to move the needle and expand ethanol use today. Limiting E15 use to 2007 and newer vehicles only creates confusion for retailers and consumers alike. America’s ethanol producers are hitting an artificial blend wall today. The goals of Congress to reduce our addiction to oil captured in the renewable fuels standard cannot be met with this decision.”

We sort of expect some associations to dislike the ruling, but for ethanol advocates to express dissatisfaction for what is a step in the right direction is confounding. The issues of contention about the conditional waiver include confusion at the pump, misfueling, air quality violations, OEM warranty issues, you name it.

How then can ethanol advocates support blender pumps, and all of the potential liabilities that could arise from that, and not this measure?

Blender pumps have signs indicating they are for flexible fuel vehicles-who doesn’t know someone living near a blender pump putting E20 in their legacy car?-and E15 pumps will have signs saying they must be used in 2007 and newer vehicles (until the secondary waiver is issued).

The blend wall must come down to fulfill RFS2, especially if we expect to create any domestic market demand for cellulosic ethanol. I see this first step as a conservative but prudent approach by EPA to approve what we in the renewable fuels industries all want-allowance of higher ethanol blend levels.