Guest Column: Read the Fine Print on the New E15 Rule

April 24, 2019

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by Doug Sombke (South Dakota Farmers Union) and Jim Seurer (Glacial Lakes Energy) (Farm Forum) ... It does in fact, propose to provide year-round exemption from vapor pressure limits for blends of 15 percent ethanol, but does no more.

The EPA proposal does not extend to higher blends. The anticipated increase in demand is not enough to make up the loss from waivers. So why would any industry sign up for a program that guarantees it cannot grow past a certain point? They shouldn’t, at least not the way the proposal is currently written.

And, before you buy the nonsense EPA will spew that this isn’t true, and the industry can apply for a waiver for these higher blends, get your calendar out. In November of 2009 the EPA was expected to approve E15 blends. While they ultimately did, 10 years later, the delay effectively stymied industry expansion.

We reject this proposal by EPA, if it will stunt future growth beyond E15. Ethanol should be permitted to be used in any quantity, at any time of year, by anyone who chooses.

If EPA has concerns, let them do the testing and prove otherwise, as citizens have done in northeast South Dakota through the E30 Challenge. How un-American is it for oil companies threatening to sue over EPA removing regulations that result in more consumer choice?

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Farmers everywhere should join us and oppose this proposal.

Let the EPA know the ruling needs changes. The comment period is now open. You can comment at https://tinyurl.com/y4sablcr. READ MORE

NFU Concerned E15 Waiver Will Impact Higher Blends (Energy.AgWired.com)

Groups reiterate opposition to year-round E-15 sales (Oil & Gas Journal)

Ethanol Blog -- Ethanol Today: Courts, Courts and More Courts (DTN Progressive Farmer)

Ethanol Report on EPA Proposals and Deadlines (Energy.AgWired.com; includes AUDIO)

OIL INDUSTRY PRODS EPA TO SCRAP TRUMP’S ILLEGAL ETHANOL PLAN: (Washington Examiner)

We need year-round E15 sales (Argus Leader)

EPA PUTTING CONSUMERS’ VEHICLES AT RISK (American Petroleum Institute)

Biofuel groups weigh in on EPA’s E15/RIN reform proposal (Biomass Magazine)

FUE Led Coalition Calls on EPA to Go Beyond E15 (South Dakota Farmers Union)

RFA Submits Comments on E15/RIN Reform Proposal (Energy.AgWired.com)

U.S. EPA asked to consider small business impact of E15, credit reform proposal (Reuters)

NCGA to EPA: Finalize E15 Parity by June 1 (Hoosier Ag Today)

E15 comments roll in to EPA: Biofuel industry opposes proposed RIN reforms, while chicken industry said new waiver standards should be created. (Feedstuffs)

National Chicken Council says E15 waiver will harm chicken producers (The Poultry Site)

Excerpt from DTN Progressive Farmer: Speaking of biofuels and legal action, with the public comment period for the E15/Renewable Identification Numbers reform rule ending on Monday, an American Petroleum Institute spokesperson made it official on Thursday: The group will file a legal challenge once the rule is finalized.

"There's no question we're challenging the rule from a legal standpoint," API Vice President of Downstream and Industry Operations Frank Macchiarola said during a call with reporters.

In addition, the API has asked the EPA for a 30-day extension of the public comment period. Though Macchiarola said it is needed to study the effects of the rule that would allow year-round E15 sales, extending the public comment period would make it unlikely the agency could finalize the rule in time for the start of the summer driving season on June 1.

Delay tactic? Seemingly. READ MORE

Excerpt from Washington Examiner: OIL INDUSTRY PRODS EPA TO SCRAP TRUMP’S ILLEGAL ETHANOL PLAN: The American Petroleum Industry joined with vehicle groups on Thursday to call on the Environmental Protection Agency to scrap the entirety of its plan to up the amount of ethanol in the nation’s gasoline supply.

Frank Macchiarola, API vice president for downstream operations, said on a call with reporters that the groups will be submitting comments to EPA detailing how the proposed rule, implementing Trump’s plan, is illegal under the Clean Air Act.

The proposed rule has two parts: Allowing the sale of 15% ethanol fuel blends year-round; and taking steps to lower the price of ethanol fuel credits that refiners require to comply with EPA’s annual ethanol mandate, or Renewable Fuel Standard.

The E15 piece of the rule is illegal and would require congressional approval to implement, Macchiarola says. And the ethanol credit provisions are a “solution in search of a problem” and would likely cause more headaches than they would remedy.

API will be joined in its comments by the National Marine Manufacturers Association, representing boat makers, and the American Motorcycle Association. Both oppose the use of E15 because of the risks it poses to both boat and motorcycle engines.

They argue that EPA has not taken the necessary steps to make consumers aware of the risks E15 poses. READ MORE

Excerpt from Biomass Magazine: The RFA (Renewable Fuels Association), however, discouraged the EPA from finalizing its proposed renewable identification number (RIN) market reforms. “While RFA is supportive of enhancing transparency in the RIN marketplace, we do not believe any of the four primary RIN reform options in the proposed rule would accomplish that objective,” the group said in its comments. “In fact, RFA is concerned that some of the major changes proposed by EPA may be counterproductive, undermine the efficient operation of the RIN market mechanism, and greatly expand administrative burdens for all parties affected by the RFS.”

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Like the RFA, Growth Energy expressed strong opposition to the RIN market reform component of the rulemaking. In its comments the trade group said the agency’s proposed RIN reforms could actually create the very market distortions they are intended to remedy.

In its comments, the American Coalition for Ethanol strongly supported EPA’s proposal to extend the 1-psi RVP waiver to E15 but urged the agency to use this rulemaking as a timely opportunity to take steps to deregulate the fuel market for higher ethanol blend use by allowing all mid-level ethanol blends to receive the 1-psi waiver, as well as to discard of its reforms to how RIN credits are handled under the RFS.

“E15 is a clean, safe, and low-cost fuel which can be used in more than 90 percent of the cars on the road today,” said Brian Jennings, CEO of ACE, in his written comments. “Since E15 typically costs 2 to 10 cents per gallon less than E10 and gasoline and has a higher octane rating (88 AKI), allowing its sale year-round would give consumers the option to buy a higher quality fuel and save money at the pump. It would also reduce refiner RIN costs and open market access for surplus corn.”

On EPA’s proposed RIN reforms, Jennings said ACE believes they “would have the effect of reducing liquidity in the RIN market, consolidate power in the hands of certain oil refiners, and limit fuel wholesalers, blenders and retailers from using RIN value to sell higher blends of ethanol. Taken together, the RIN reforms constitute a poison pill which is incompatible with the goal of making E15 available to consumers year-round.”

The National Biodiesel Board expressed appreciation for the EPA’s efforts to enable the growth of biofuel use by allowing year-round E15 sales, but spoke out against the agency’s RIN reform proposals.

“The proposed RIN market reforms are unnecessary, as EPA has yet to see data-based evidence of RIN market manipulation. Reforming a system that, while certainly not perfect, is working as intended with no evidence of manipulation has the potential to disrupt and even undermine the system that obligated parties use to demonstrate compliance with the RFS,” NBB wrote in its comments.

“We ask that the agency use this proposed rule as an opportunity to provide transparency to the small refinery exemption process and address the timing of granting these exemptions,” the NBB continued.

“Right now, retroactive small refinery exemptions are having the most negative impact on RIN markets, destroying demand for more than 360 million gallons of biodiesel and renewable diesel,” said Kurt Kovarik, vice president of federal affairs at NBB. “Rather than unneeded reforms that could further disrupt the RIN market, EPA should increase transparency around the small refinery exemptions, end its practice of encouraging retroactive petitions, and ensure that annual volumes that it set are met.” READ MORE

Excerpt from South Dakota Farmers Union: Farmers Union Enterprises filed comments with EPA following the agency's Notice of Proposed Rulemaking to extend the current reid vapor pressure allowance to blends of 15% ethanol in gasoline. While applauding the proposal, the commenters challenged EPA on their limiting the rule to just 15% and presented a detailed legal and technical argument as to why higher blends are permissible.

FUE President Doug Sombke said if the rule is finalized as proposed it would limit the broader use and availability of ethanol, contrary to the intent of Congress when it established several programs to cap toxic carcinogens currently in gasoline. Higher blends could achieve that goal, according to Sombke, such as E30 which has been successfully used in South Dakota and is planned to be demonstrated by both South Dakota and Nebraska state fleets.

The comments support EPA's finding that E15 is substantially similar to E10 in all respects but oppose the proposed requirement that any blend above E15 would be required to apply for similar approval.

""EPA continues to rely on outdated and biased historical models and studies that penalize ethanol," said Sombke. "With the designation of E10 as a certification test fuel, the time has come to put ethanol on equal footing with other fuels and additives. Higher volumes of ethanol reduce vapor pressure, dilute toxics and sulfur, and provide low carbon, clean octane.

The proposed rule does not meet the objectives of existing law, Congressional intent, and fails to recognize best available science."

Joining Farmers Union Enterprises on the comments are the National Farmers Union, South Dakota and Nebraska Farmers Union, Urban Air Initiative, Clean Fuels Development Coalition, and Glacial Lakes Energy.

"EPA is doing the right thing, but not enough of the right thing. If we are forced to file new applications for higher fuel blends and wait nearly ten years like we did with E15, the ethanol industry, and the agriculture industry that supplies it, will be severely damaged and is likely to never grow beyond the depressed levels we are seeing now," said Sombke.

Copies of the FUE Coalition comments can be accessed at the South Dakota Farmers Union website at www.sdfu.org. Comments can also be found on the National Farmers Union website at www.nfu.org, and the Clean Fuels Development Coalition at www.cleanfuelsdc.org. READ MORE