The EPA E15 Ruling– No Need to Stop There.

May 14, 2024

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by Doug Durante (Clean Fuels Development Coalition/Biofuels Digest) Go ahead, blend any amount of ethanol you want. And here’s why. -- ... The recent decision by the Biden Administration to provide an “emergency waiver” so E15 can continue to be sold during the summer months is of course good news but can’t help but leave a bad taste in our mouths. It is once again a kick-the can-down the road action driven by politics rather than common sense and practicality.

Just calling it an emergency waiver is an affront. How is it that the excuse to grant this waiver is that high gas prices and tight supplies justify it? Does that mean if gas was cheap they wouldn’t? Just once I’d like to see an EPA announcement that leads with the fact that the RFS and the ethanol it has unleashed is a low cost, high octane, low carbon fuel that has displaced more than 8 billion gallons of toxic aromatics, and this ruling is to the benefit of all consumers. With EVs in freefall, we are going to need that octane more than ever, which I’ll get to.

Instead, the agency stands by and makes little effort to correct mainstream media that reports they are lifting the “ban”, which is clearly a negative connotation and perpetuates the notion that the EPA is allowing a higher polluting fuel. It’s not unreasonable for a reporter, an elected official, or anyone else to ask, if this stuff was banned, why are you allowing it?

For starters, E15 is not and was never “banned”. Other than California, it is allowed to be sold anytime, anywhere—provided it meets the same vapor pressure limits of gasoline. E10, on the other hand, is provided a one pound waiver from that limit.

The ABCs of RVP

Under existing regulations, if the summer vapor pressure limit in any given area was, for example, 8 pounds pers square inch (psi), E10 would be allowed at 9 psi. E15 could be used but only of it if it met the 8-pound standard—even though it is the same or lower RVP as E10. While it clearly makes no sense, it illustrates that there was no “ban”. The problem of course is that refiners would have to provide specialized sub-rvp gasoline so after the additional ethanol is added it did not exceed limits.

That is impractical for most refiners and the result is that retailers selling E15 have to stop selling in the summer months, hence the perception that it was banned.

By now we all know the lunacy of this– with no Rvp bump there is no rational reason to interpret the law the way EPA, refiners, and the courts have done. For 10% ethanol blends to get the one pound waiver and argue it only applies to 10% is absurd. In fact, the authorizing language for the Rvp waiver is for gasoline containing 10% ethanol. Well, E15 contains 10% ethanol. What is more frustrating is that in a quirk of chemistry, the increase in vapor pressure peaks at just under 10% and then begins to go down as more ethanol is added. At 30% we would have a lower cost, high octane premium gasoline with no vapor pressure increase at all!

That high octane would allow automakers to easily increase compression to achieve the efficiency and reduced emissions we will never see from EVs. It is an illusion that EVs can provide meaningful near-term reductions in petroleum use or provide health benefits that the recent multi-pollutant rule promises. And these health issues are increasingly ignored due to the fixation on climate. Carbon may be killing the planet but it is killing people too.

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There are a couple of different approaches to resolving the Rvp issue. The first, and simplest, would be to have a nationwide standard that recognizes there is no negative difference to E15 and treat it the same as E10, everywhere, all the time. This has been denied by the courts and legislative efforts to date have not succeeded.

Frustrated after more than a decade of arguing this issue, 8 Midwest Governors said fine, if you are not going to extend the waiver then we reject it–all gasoline sold in our states must meet the same standard. Since refiners have set up their process to put out a sub-octane fuel and rely on ethanol to bring it up to specification (i.e. 87 octane minimum), this will force them to make the base gasoline low enough in vapor pressure that adding ethanol—any ethanol, be it 10 or 15%, meets the same final spec.

To clarify, what the Governors did was request EPA to opt their states out of the one-pound waiver, not to “allow” the sale of E15. The result, of course, is if the proper base gasoline is provided then there would be no limit to the sale of E15 This is not splitting hairs– it is an important nuance because if an ethanol blend can be sold as long as it does not exceed Rvp limits it should apply to any blend. And this is where it gets exciting. This is a kick the door down, get out of the way path to truly higher blends.

Go Ahead– Blend Away.

Ethanol is an additive to gasoline. It is an approved additive in EPA certification fuel which, as the term implies, is used to certify emissions and efficiency. The late C. Boyden Gray, unquestionably one of the great legal minds in the fields of fuels and emissions, argued that once ethanol became an approved additive for the purpose of certification there is no restriction on how much ethanol can be blended with gasoline. In fact, he argued the burden of proof would be on EPA to demonstrate—after they did extensive testing—that there were negative emissions associated with such blends.

What all this means for ethanol is that retailers should feel free to blend any volume of ethanol they choose. Under the Governor’s request, all gasoline with ethanol would have to meet whatever the standard is for non-blended gasoline. Under a nationwide legislative fix all ethanol blends would be treated as E10 in terms of RVP. Either solution is better than where we are today, although a national solution would be preferable. Under both these scenarios, there seems to finally be the acknowledgement that we are talking about ANY/ALL blends greater than E10, rather than restricting this to just 15%. E15 could become the base gasoline nationwide.

While auto and government testing validate E30 as the optimum blend level, not limiting the Rvp issue to 15% is important because an orderly transition to an E30 fuel cannot happen overnight and splash blending up to an E20 or E25 may be a stairstep to E30. This is the scenario laid out in the Next Generation Fuels Act which has languished in Congress but is the best piece of legislation to come along since the RFS.

EVs will certainly have a role in future transportation, and they should. But I can fill the bed of a Ford E 150 with documentation that it is going to take more time than we are being told.

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With the largest motor fuel market in the world, for the US to allow itself to be captive to a 90% gasoline market is asinine. As we have pointed out many times, countries around the globe are using 20-30% blends and providing their citizens numerous benefits. We should be doing the same. READ MORE

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The fight for E15 and how it helps agriculture [Podcast] (Feed & Grain; includes transcript)
EPA Extends Clean Air Act Waiver for E15 Summer Use -- NACS continues to advocate for permanent year-round sale of E15 instead of short-term waivers. (NACS)
Biofuel win in the US to boost ethanol and crop prices (Agriland)

Excerpt from Feed & Grain: Join Steven Kilger, host of the Feed & Grain Podcast, in a compelling conversation with Geoff Cooper, President of the Renewable Fuel Association. In this episode, they explore the pivotal role of ethanol in supporting both farmers and consumers, the ongoing efforts to secure year-round E15 usage and addresses common criticisms of ethanol production

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Geoff Cooper:

Today E15 is typically priced anywhere from 10 cents to 30 cents per gallon below the price of regular gasoline. And so why would we take that away on June 1st? Why would we not double down and try to get more E15 in the marketplace to allow consumers to enjoy lower fuel prices? And that's what this action by EPA would do.

Kilger - 07:58:

Yeah, especially because like I said, this meeting of a waiver is all based on kind of outdated science from 30 years ago and does not consider, you know, modern engines and modern cars and things like that. And even today, I read something about some groups being upset with the aviation fuel standards and how they don't think ethanol should be involved, but ethanol is better for the environment ultimately. And if that's something we're really concerned about in this country, It's important.

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Cooper - 08:38:

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But you're right, ethanol is hands down better for the environment than gasoline. There is not any legitimate scientific debate about the science overwhelmingly shows Ethanol reduces greenhouse gas emissions relative to gasoline. It reduces the tailpipe pollutants of things like nitrogen oxides and particulate matter and all those pollutants that contribute to poor air quality and human health problems, asthma, lung disease.

Ethanol reduces those emissions and there is an enormous body of science and research That shows that unfortunately we do continue to see people raising lots of myths and misinformation about the use of ethanol and its impacts on the environment. The big myth we hear is that boy if we're going to be using more corn for ethanol then we're going to have to massively expand our cropland in this country and we're going to have to cut down forest and we're going to have tear up native prairie grassland To plant more corn, to produce this ethanol. And if we do those things, then it negates any environmental benefit that ethanol would have.

Well, that's completely ridiculous. And when you look at the data, when you look at what has happened in this country, as we have vastly expanded production and use of ethanol, crop land continues to fall year after year after year. That trend began long before biofuels were around, and that trend has continued. In the biofuel’s era, so we are producing more corn and we're certainly producing more ethanol, but that increased supply of corn is not coming from additional acres. It’s coming from increased efficiency and higher yield and growing more corn on the same number of acres or on less land than we did several decades ago.

Kilger - 10:40:

Well, plus it assumes that, you know, that corn is just gone, which isn't true because ethanol does very useful byproducts like DDGs that are incredibly useful for the feed industry. And from what I understand, the technology with those is getting better and better too. So, they're producing higher quality byproducts. So, it's not like it's just gone. It’s there.

Cooper - 11:04:

That's right, and that's a great point that again is so often overlooked. When we take a 56-pound bushel of corn and run it through an ethanol plant, we're getting multiple products out the back end of that facility. Ethanol is only one of those. We get about close to three gallons of bushel of ethanol when you put that bushel of corn in a facility.

But you're also getting 15 or 16 pounds back as animal feed. Distillers’ grains and other co-products where the protein that was in that corn is concentrated and so is the fiber and some of the other nutrients that livestock and poultry need in their diets. And that co-product, distillers’ grains, has been a hugely successful and popular feed ingredient both here domestically in the U.S., but also worldwide.

We export close to one third of the distillers’ grains that this industry produces. We’re also producing corn oil, distillers corn oil, that itself is a valuable feed ingredient for poultry and certain other species, but it's also a feedstock that is used to produce renewable diesel fuel and biodiesel. So, these are just some of the things that are coming out the backside of an ethanol plant. And again, most people don't understand that these are really bio-refineries that are producing a wide array of products, not just ethanol.

Kilger - 12:29:

Yeah, it's a very efficient use of corn because we get so much out of it versus just, you know, a single use product. So, it's also good for agriculture, especially farmers because let's face it, producers have been hit with a lot over the last 10 years and they tend to get the short end of the stick when commodity prices go up and down. And lately it's, they've been trending down. So, this is helpful. Is that part of your message of like, hey, this is good for our rural communities and our producers?

Cooper - 13:04:

Absolutely it is and we are joined at the hip with agriculture and in fact I mean the ethanol industry would not exist today if not for the fact that 20 to 25 years ago we had farmers across the country coming together pooling their resources to build ethanol facilities in their rural communities as a way of developing a new market.

I mean I think we all remember what the corn market looked like in the 1990s and early 2000s, it was a surplus driven marketplace. We had high surplus levels, large record levels of carry out, low prices for corn, prices that were below the cost of production. And rather than continuing to rely on the government for income, asking the government to help keep these farms whole. Farmers got together and built from the ground up a new market for their product. They created a new market that has substantially added value.

To the products they're producing on the farm, and we look at the fact that there are roughly five billion bushels, five and a half billion bushels of corn going into the ethanol industry today. Again, not just making ethanol but stores grains and all those other products. And we think about where the corn market would be without that additional demand. There’s been a number of studies and analyses and economists that have looked at this and they have concluded that foreign prices aren't great right now, as you mentioned, but would be in real trouble.

Without the existence of robust demand for the ethanol industry, some studies have found that probably $1.50 to $2 or roughly one third of corn price that we've seen the past few years is attributable to demand from ethanol. So, it has been a real success story for rejuvenating the farm economy. And not only does it provide a new market for farmers and help raise their basis prices for corn, but it creates jobs in these communities as well.

And most ethanol facilities employ 50 to 60 people directly. But then there's also all those service providers and input providers and others whose jobs exist because of those facilities as well. So, it's really been great story for rural America and farm economy. And that's something we're very proud of.

Kilger - 15:30:

Yeah, no one likes to see farmers go out of business. They deserve stability. The whole industry really does deserve some stability. It’s disheartening when people kind of lose that part of it. And that's part of what this waiver does, right? It gives some stability to the ethanol industry, which also has to Figure out whether they can keep plants open, whether they have to shutter them during all these other things. Can you talk a little bit about what this means to the ethanol industry and their ability to just stay in business?

Cooper - 16:03:

Yeah, that's right. What the summertime waiver for E-15 does is keep the market open. Like I said, we're able to sell E-15 or retailers can sell E-15 from September 15 to June 1 every year. And so, what this waiver does is it keeps that market open. It keeps our facilities running. At high levels of output and capacity. And it allows for continued growth and continued expansion in the marketplace and in the use of E15.

And all of that, again, you trace it all the way back. And yes, that has an impact on the farm. It has an impact on planning decisions that farmers make. It has an impact on corn prices. And the decisions they're making with their own businesses. So that's why these decisions that come from bureaucrats in Washington DC are so important and have so much impact on lots and lots of people here in the Midwest and across country. And so yes, the main benefit of this waiver is it keeps a market open and keeps it in expansion mode for both corn producers and ethanol producers as well.

Kilger - 17:19:

Yeah, just the consistency alone. It’s hard to invest millions of dollars in new infrastructure. It’s hard for gas stations to get what they need to sell this stuff. If there's always this question of, well, is it going to be around for these three, four months during the year?

Cooper - 17:35:

That's right, and E15 is available today at about 3500 stations, somewhere between 3500 and 4000 stations. But we do still encounter a number of retail operators that have told us, well, we'd love to sell E15, we'd love to offer that product to our consumers. We like its lower price, we like its environmental attributes, but we are not going to make the investment to make even modest upgrades to our dispensers or other changes that need to be made unless we have the assurance that we can sell this product year-round. And that's why this is so important and why we need a permanent solution rather than ad hoc waivers every summer.

Kilger - 18:20:

Yeah, so the permanent solution, it sounds like that's the next big goal. Is there anything else that you guys are kind of advocating for, working on right now too, I know there was just big ruling by the IRS about sustainable aviation fuel credits, which is a mixed bag best. It seems like things are, at least it's on people's minds. So, is there anything else you're really pushing for right now?

Cooper - 18:44:

Securing a legislative fix for E-15 remains our top priority because we do believe that would have the most impact on our industry and on corn demand and ethanol demand and really keep the industry moving in the right direction. But in the longer term, we do see enormous opportunities for ethanol in non-traditional markets outside of the gasoline tank. And certainly, sustainable aviation fuel is one of those areas.

There’s been tremendous amount of work emerging in that arena. There’s actually the very first Facility in the world that will take ethanol and convert it to jet fuel began production earlier this year So it is a rapidly emerging market opportunity for ethanol but there's a lot of things that need to fall in place to get that right and really get that opportunity off the ground and that includes having tax policy that is supportive of further expansion in that industry and there was a recent ruling from the IRS.

That discussing how those tax credits will be implemented and we think it does begin to open the door to the use of corn ethanol as a source of sustainable aviation fuel but there's more work to be done and certainly some improvements that need to be made before that tax credit program is really going to kick open the door to large volumes of corn-based ethanol. READ MORE

Excerpt from NACS: The Environmental Protection Agency (EPA) extended a Clean Air Act waiver that will allow the continued sale of E15 across the U.S. through August 8.

The waiver allows parties to produce, sell and distribute summer gasoline that exceeds the current one-pound PSI RVP standard if the fuel contains 15% ethanol. The current waiver was set to expire this Saturday.

In April, the EPA first announced that it would use its emergency waiver authority to allow for the sale of E15 through May 20. Additional waivers were announced May 17, June 6 and June 26. The waivers can be seen here.

“While NACS supports these short-term waivers that allow for the sale of E15, we continue to pursue permanent legislation that would allow for its year-round sale,” said Paige Anderson, director of government relations at NACS. “A permanent legislative solution would ensure certainty for fuel retailers that want to offer E15 to their customers.”

“This action [the waiver] is important to fuel retailers as it is vital that our members have a consistent, reasonably priced gasoline supply, especially as we face an uncertain economic climate this summer,” Anderson said at the time of the initial waiver in April.

NACS has been working with a broad group of stakeholders to pass legislation that would provide a permanent solution to ensure the year-round sale of E15. One of the key issues facing fuel retailers who want to sell E15 is the inability to sell E15 year-round. READ MORE

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Yields waiver Transportation Fuels Policy Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel Reid vapor pressure (RVP) Regulations-Federal podcasts one pound waiver octane Midwest markets/sales market forces Legislation-Federal land use change land use history high octane low carbon (HOLC) fuel High Octane Fuel (HOF) health benefits gasoline mandate gasoline fuel prices ethanol/bioethanol ethanol blends/ethanol flex fuels EPA (Environmental Protection Agency) environmental policy Electric Car/Electric Vehicle (EV) E30 E15 price E15 E10 certification fuel E10 DDGS (distiller’s dried grains with solubles) corn/maize corn oil/distillers corn oil (DCO) corn ethanol compression ratios co-products California blendstock biodiesel aromatics animal feed Air Pollution Policy Agricultural Policy

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