On Friday, EPA extended the waiver for the general use of gasoline blended with up to 15 percent ethanol (E-15) to model years 2001-2006 cars and light trucks. EPA reached its decision after reviewing the results of tests of E-15 on 2001-2006 engines conducted by the Department of Energy.
EPA announced that it will not grant a waiver for the use of E-15 in any motorcycles, heavy-duty vehicles or non-road engines this year. The agency stated that that there is no testing data to support such a waiver.
AFBF policy supports increasing the ethanol blending standard to a level higher than 10 percent.
Agriculture Resumes its Infighting
The Grocery Manufacturers Association and the American Meat Institute joined other groups in filing a lawsuit Tuesday against EPA to overturn the agency’s decision to allow a higher ethanol blend in gasoline. The groups said EPA overstepped its authority in allowing cars built in 2007 and later to burn E15 or gasoline with a blend of 15 percent ethanol.
In its filing with the U.S. Court of Appeals, the groups said EPA “clearly exceeded its authority under the Clean Air Act” and “the agency has a legal obligation to adhere to the letter and spirit of the Clean Air Act and, in this case, has failed to do so.”
The American Farm Bureau is a proponent of the blend increase ruling. “Ethanol is a clean-burning, home-grown renewable fuel. Increasing the percentage of ethanol in the domestic gasoline supply moves our nation one step closer to greater energy independence,” said AFBF President Bob Stallman. “It also promotes job creation in rural America.”
Higher corn prices haven’t put a dent in profits for ethanol plants thanks to strong demand for the biofuel and higher prices for dried distillers grain.
Ethanol plants in Iowa are earning a profit of about 27 cents for every gallon produced, compared to a loss of 6 cents per gallon as recently as July, according to Ag Trader Talk, an online grains-information service in Clive, Iowa.
“If you’re not making money in ethanol right now, you have a problem with your production process,” said Jason Ward, an analyst at Northstar Commodity Investments LLC in Minneapolis. “They’ve got three of the four main components working in their favor.”
Following the EPA's decision, filling stations will now be able to sell gasoline blended with up to 15% ethanol.
The Environmental Protection Agency’s approval of E15 (gasoline blended with up to 15 percent ethanol) for model year 2007 and newer cars and light-duty trucks is a step toward strengthening America’s commitment to home-grown energy, according to the American Farm Bureau Federation.
“Ethanol is a clean-burning, home-grown renewable fuel. Increasing the percentage of ethanol in the domestic gasoline supply moves our nation one step closer to greater energy independence,” said AFBF President Bob Stallman. “It also promotes job creation in rural America.”
The decision announced by EPA Wednesday applies to 43 million vehicles or about 20 percent of the current U.S. duty fleet. A second decision by EPA on the use of E15 (for model year 2001 to 2006 cars and light-duty trucks) will be made after additional Department of Energy testing is completed toward the end of the year. A total of 86 million cars/light-duty trucks or about 54 percent of all vehicles on the road today are model year 2001 to 2006.
The EPA yesterday approved a request by Growth Energy, and ethanol industry trade group, to increase the amount of ethanol blended into regular unleaded gasoline from 10 to a maximum of 15%. The approval of the ‘green jobs waiver’ will allow companies to blend up to 15% ethanol into motor vehicle fuel creating a blend known as E-15.
The new standard applies only to 2007 and newer model cars and trucks. EPA is expected to decide whether to approve E15 for vehicles 2001 to 2006 in November.
According to Growth Energy, the group that proposed the new standard, the decision is the first move to help eliminate the ‘blend wall’ or the point at which no more ethanol can be used by the U.S. fleet due to the arbitrary 10% blend limit.
The Renewable Fuels Association reported last week that ethanol production and demand have reached an all-time high. According to data released by the Energy Information Administration (EIA) ethanol production in June was just over 854,000 barrels per day (b/d), or 1.08 billion gallons for the month. Based on data from the first six months of 2010, US ethanol production is running at 12.87 billion gallons on an annualized basis, 172,000 b/d more than in 2009.
Last week a group of bipartisan senators requested information from the EPA about why E15 has not been approved. Some answers are finally filtering through. After a meeting with EPA administrator Lisa Jackson and a Department of Energy (DOE) official on Monday a few answers were revealed.
The EPA’s request for additional testing of the engine effects from fuel with 15% ethanol was prompted, according to Senator Chuck Grassley (R-IA) because the EPA expects to be sued by opponents of E15. Environmentalists have teamed up with small engine manufacturers and the oil industry and are expected to sue the EPA. The collection of additional data is to ensure E15 can remain in the market once it is opened.
Senators were also encouraged to hear evaluation of E20 is also being conducted by the DOE. Such evaluations could provide the EPA with the basis to approve E20 and E15. However, it will take some time and higher blends will likely not be available to consumers until sometime in 2011.