The ‘E’ Is Silent

April 14, 2023

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by Ron Lamberty (American Coalition for Ethanol) When EPA examined concerns about removing the 1-pound RVP waiver during the high-ozone season to facilitate year-round blending of E15, it gave zero consideration to the negative economic impact a "gap year" would have on retailers of the blend.

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Over the years, however, I began to understand, and learned a catchphrase the old-timers used when they talked about disappointing decisions and actions made by EPA: “the ‘E’ is silent.”

Nothing hammered home the disconnect between EPA and the first word in its name more than the past decade of trying to make E15 a mainstream fuel. And maybe it’s because I’m one of the old-timers now and have forgotten more egregious actions in the past, but I can’t recall a time when EPA’s cozy partnership with the oil industry—the world’s worst polluters—was more on display than its recent proposed rule responding to eight Midwest Governors’ requests to remove the 1-pound Reid vapor pressure (RVP) waiver from all fuels during the high-ozone season to facilitate year-round blending of E15.

In the rule, EPA acknowledges that upon notification by the governor of a state, and with required documentation, the EPA administrator “shall, by regulation, apply the volatility limit.” Simple and straightforward. And yet, EPA waited almost a year to say they’ll obey the law ... later.

EPA also acknowledges the “shall” gives them “limited if any discretion [to] consider other issues such as economic impacts of removing the 1-psi waiver.” Yet, immediately after pointing out those facts, EPA limits itself to about 20 pages of consideration of the economic impacts of removing the 1-psi waiver. They use the codename “adequate supply” instead of economic impact, but the “impacts” examined are unsurprisingly similar to the usual boatload of red herring refiners dump on every rule ever proposed to expand E15 availability. EPA’s conclusions also echo the oil industry’s tired warnings of “it’s too difficult” and “prices will rise astronomically.” Unfortunately, the oil guys can make that second part true any time they want.

Any shred of doubt that the “E” is silent and EPA looks out for its oil BFFs first, was removed for me when, in the rule, EPA lamented refiners’ “lost opportunity cost for having to sell the removed butane at market prices for butane instead of blending it into high value summer gasoline.” EPA defending more butane in gas? What?

While EPA examined the real and imaginary objections typically offered by refiners, it conspicuously gave zero consideration to the economic impact its “gap year” would have on E15 retailers and consumers. Retailers who have offered E15 and consumers who purchased E15 year-round in 2020, 2021, 2022, and who will buy it again in 2024 would be forced to switch for three and a half months because EPA dragged its feet on the governors’ requests. Retailers would have increased costs from switching fuels in their tanks twice, service calls to adjust blender pumps twice, and changing out pump decals twice. Consumers who use E15 because it saves 5 to 15 cents versus E10, and is 45 to 95 cents cheaper than “clear” gas, will have to spend more for fuel they don’t want during the busiest time of the year.

EPA should show retailers, consumers, and the environment a fraction of the concern they’ve shown for refiners, by urging the Administration to grant an emergency 1-psi RVP waiver for blends above 10 percent ethanol in 2023. It's the least EPA could do (which is traditionally what they’ve done for ethanol). READ MORE

Ethanol groups call on EPA to implement Midwest E15 petitions now (Ethanol Producer Magazine)

Oil lobby wants Reynolds, other governors to drop E15 push, saying it will hike gas prices (Des Moines Register)

Excerpt from Ethanol Producer Magazine: In its comments on the Midwest E15 proposed rule, the Renewable Fuels Association urged the EPA to impellent the rulemaking now rather than waiting until 2024. “There is no economic, environmental, or legal justification for the Agency to defer implementation another year,” wrote Geoff Cooper, president and CEO of the RFA. “If there is any problem with implementing the governors’ requests this summer, it is one of the administration’s own making, which is not a legitimate reason for further delay.”

Cooper pointed out that because the original governors’ petition requesting year-round E15 was submitted in April 2022, EPA had a legal duty to approve and implement it by the end of July of last year. Even though the law clearly establishes a 90-day deadline for implementing a petition from governors, “the administration did not act on the petition for nearly a year, and now EPA is using this delay as an excuse to defer implementation for another year. This is creating considerable uncertainty in the marketplace and putting at risk hundreds of millions of dollars of infrastructure investment by fuel retailers, ethanol producers, the U.S. Department of Agriculture, and other stakeholders.”

Cooper also stressed that the EPA did not demonstrate that implementing the year-round E15 regulation this summer would cause an insufficient supply of gasoline in the petitioning states, noting that an insufficient supply is the only permissible justification for delaying implementation. He also indicated that the EPA has mischaracterized RFS-commissioned studies that show implementation of the governors’ request in 2023 is expected to be manageable, and said any difficulty in implementing the regulation this summer would likely be a result of the EPA’s lengthy delay in responding to the governors’ petitions.

Growth Energy told EPA that implementing the Midwest E15 petitions now would extend access to cleaner, more affordable biofuel blends. “For motorists, the value proposition of E15 is clear,” wrote Chris Bliley, senior vice president of regulatory affairs at Growth Energy. “It gives consumers an additional choice at the pump that allows an additional pathway to market for homegrown ethanol.”

In the letter, Bliley also highlighted E15’s advantages in terms of enhancing U.S. energy security and decreasing volatility in the American fuel market. “Reliance on petroleum energy sources can lead to substantial swings in fuel prices, as seen during the 2022 summer driving season as prices skyrocketed in response to the Russian invasion of Ukraine, inflation, and other factors,” he said. “During this period, E15 provided consumers with a significantly lower-cost fuel option at the pump, with savings of $0.16/gallon nationwide and up to $0.96/gallon in certain locations. If E15 were to replace E10 on a nationwide basis, consumer spending on motor fuel would decrease by $20.6 billion.”

The American Coalition for Ethanol also called on the EPA to take swift action to implement the governors’ petitions. While ACE appreciates EPA finally taking action on the governors’ petitions, CEO Brian Jennings explained if EPA chooses not to implement the rule in 2023, the agency’s “legally questionable delay to 2024 will force millions of people in conventional gasoline areas of the U.S. to pay much more at the pump during this year’s summer driving season – on the heels of last year’s record-high gasoline prices and continued inflationary pressure on American families.”

With the sense of urgency about the fast-approaching June 1, 2023 summer driving season and market access for E15 in all areas of the country, including conventional gasoline areas, Jennings urged the agency to take emergency action in ACE’s comments. “Given the pressing need for consumers in conventional gasoline areas of the country to have access to the lowest-cost fuel available to most vehicles on the road this summer, we strongly urge EPA to take emergency steps pursuant to Section 211(c)(4)(C)(ii) to allow E15 for the 2023 summer driving season, similar to the steps taken by yourself and President Biden last year.”

“The conditions used by the administration to justify invoking this emergency statutory authority last year persist today – in fact some market indicators are more concerning today,” Jennings added.

ACE’s comments argue how EPA’s proposal favors refiners and their “anticompetitive behavior” over consumers, retailers and the environment.

Jennings concluded by reiterating if there are real concerns related to the gasoline supply chain relative to a 2023 implementation date, they are problems of EPA’s own making. “…if the agency had responded to the eight petitioning states within the statutorily required 90 days there would be no need to fret about refiner concerns with timing.”

Jennings added, “EPA should balance the interests and side with consumers, retailers and the environment instead of refiners by finalizing a regulation removing the volatility waiver in these states for the 2023 summer driving season, consistent with the governors’ 2022 request and the statute.” READ MORE