Relieving the Pressure: There’s Movement at Last to Obtain an RVP Waiver for E15 ...

by Susanne Retka Schill (Ethanol Producer Magazine) ... “There’s a very tight window between today and June 1,” says Brian Jennings, CEO of the American Coalition for Ethanol. “The big-picture goal is for the proposed rule to be out for public comment and for EPA to wrap up a final rule prior to that June 1 date when low RVP season kicks back in.”

In a statement released Oct. 25, Jennings says EPA bureaucrats already appeared to be “slow-walking” the rule, and oil refiners were threatening to sue over the waiver.

Most of the gasoline used in the U.S. today is E10, with an RVP of about 10 psi. The Clean Air Act provides a 1 psi waiver for fuel blends containing gasoline and 10 percent ethanol. In 1991, EPA interpreted that section of the act to limit the waiver to gasoline with 9 to 10 percent ethanol, because 10 percent was the maximum amount allowed in gasoline at the time. In 2011, EPA approved the use of E15 in vehicles model year 2001 and newer, but did not extend the E10 RVP waiver. E15’s RVP is actually better than E10’s, and its tailpipe emissions are lower than that of E10.

“I’ve never had a conversation with a career bureaucrat at EPA that (included), ‘We don’t think the law allows us to do this,’ or, ‘We don’t agree with you that E15 has a better evaporative emissions profile than E10,’” Jennings says. “In other words, they agree with us on the legal authority and that E15 makes sense from an environmental standpoint. It’s simply that some of those forces in EPA have not wanted to do it, and no one has forced them until, hopefully, now.”

“These rule makings can be complicated,” Cooper says. “They involve lots of stakeholders with lots of different opinions. Our work is just beginning for securing RVP parity for E15 and ensuring the president’s commitment to getting this done is seen through.” He expects the proposed rule to lay out a few options. “I think we’ll see a few different concepts on how to interpret different provisions of the statute,” he says. “We think there are some very defensible interpretations that would stand up to legal challenge.”

“We’ve had lots of discussions with EPA,” Bliley says. “The entire industry has presented some of the best arguments for how they can do this legally. We expect them to lay out their process of how they can do it under the law, and in the most defensible way possible. And, we certainly expect our opponents in the oil industry to come out and attack.” A legal challenge could, of course, delay implementation, even if EPA meets the tight timeline.

Demand Growth Potential
Predictions vary on how quickly RVP parity for E15 will translate into significant ethanol demand. Jennings predicts hundreds of millions of gallons in the short term, but cautions, “We shouldn’t oversell it, because half of the retailers are under some sort of contract restriction—a branding or supply agreement with an oil company that limits the choices they have.” Predictions of 5 billion to 7 billion gallons in the long term, however, are fair, he says, although it will take time.

Within a week of the administration’s directive to EPA on the waiver, two large retailers announced E15 expansions. Casey’s General Store, a Midwest convenience store chain, will expand its offering of E15 to more than 500 of its locations over the next few years. Casey’s first offered E15 in April 2017, at 17 sites in Illinois, Iowa and Kansas. And Cumberland Farms, a Massachusetts-based chain in the Northeast, announced it will begin offering E15 at more than 120 of its stores.

Since starting with its stores in North Carolina in 2015, Pennsylvania-headquartered Sheetz now has 240 locations offering E15, or about 40 percent of its stores in six states. With four seasons of relabeling dispensers for the summer driving season under its belt, Mike Lorenz, executive vice president of petroleum supply, says it was never a smooth transition. “Not only was there a cost to relabeling dispensers twice a year, but the confusion caused with consumers hasn’t changed.” The chain would see an increase in sales until June 1 that dropped off when the labels changed to say FFVs only. “Then it’s very difficult coming out of the summer driving season to get those sales back.”

Growth Energy has launched a nationwide campaign to market E15 as Unleaded88. The name was chosen following years of research, focus groups and interviews with consumers at the pumps. It allows brand recognition and reduces confusion, according to Growth Energy. It starts with about 20 large retailers and, with the E15 waiver, hopefully spreads to many smaller ones.

Lorenz says fixing the year-round availability issue is going to encourage many retailers who have stood on the sidelines, seeing the opportunity, but not willing to hassle with the summer labeling changes. READ MORE