EPA Delays Decision on Higher Ethanol Blend in Gas

Date: December 1, 2009

Source: US EPA and Growth Energy

The US EPA, in a letter to an industry group, put off until the middle of next year, any decision about whether to increase the allowable ethanol content in fuel. In a letter to Growth Energy, an ethanol lobby group, the agency said that more testing was necessary, but that some initial results indicate that raising the amount of ethanol blended into gasoline would be feasible for newer cars. Growth Energy wants to raise the maximum amount of ethanol to 15% from 10% currently allowed. In a press release, Growth Energy co-chairman Wesley K. Clark, the retired Army general and onetime presidential candidate, characterized EPA's letter as "basically a positive answer. It's a waypoint toward a decision that clearly foresees some future investments in ethanol." However, Bob Dinneen, chief executive of the Renewable Fuels Association, warned that the "delay threatens to paralyze the continued evolution of America's ethanol industry."

EPA Press Release:

EPA Notifies Industry Group on Status of Ethanol Waiver Request

Release date: 12/01/2009

Contact Information: Deb Berlin, berlin.deb@epa.gov, 202-564-4914, 202-564-4355

WASHINGTON The U.S. Environmental Protection Agency (EPA) today announced that it expects to make a final determination in mid-2010 regarding whether to increase the allowable ethanol content in fuel.

In a letter sent today to Growth Energy a bio fuels industry association that had asked EPA to grant a waiver that would allow for the use of up to 15 percent of ethanol in gasoline the agency said that while not all tests have been completed, the results of two tests indicate that engines in newer cars likely can handle an ethanol blend higher than the current 10-percent limit. The agency will decide whether to raise the blending limit when more testing data is available. EPA also announced that it has begun the process to craft the labeling requirements that will be necessary if the blending limit is raised.

In March 2009, Growth Energy requested a waiver to allow for the use of up to 15 percent ethanol in gasoline, an increase of five percent points. Under the Clean Air Act, EPA was required to respond to the waiver request by December 1, 2009. EPA has been evaluating the group's request and has received a broad range of public comments as part of the administrative rulemaking process. EPA and the Department of Energy also undertook a number of studies to determine whether cars could handle higher ethanol blends. Testing has been proceeding as quickly as possible given the available testing facilities.

Text of the letter:

United State Environmental Protection Agency
Washington, D.C. 20460

Office of Air and Radiation

General Wesley Clark
Co-Chairman
Growth Energy
1900 K Street, N.W.
Suite 100
Washington, D.C. 20006

Mr. Jeff Broin
Co-Chairman
Growth Energy
1900 K Street, N.W.
Suite 100
Washington, D.C. 20006

Dear General Clark and Mr. Broin,

It is vitally important that the country increase the use of renewable fuels. To meet that goal, EPA is working to implement the long-term renewable fuels mandate of 36 billion gallons by 2022. To achieve the renewable fuel requirements in future years, it is clear that ethanol will need to be blended into gasoline at levels greater than the current limit of 10 percent. To help address this so-called "blend wall" issue, EPA has been evaluating the request from Growth Energy to allow for the use of up to 15 percent ethanol in gasoline (E15). As we have seen in the range of comments from stakeholders, this is a critical issue and also one where there are widely divergent views. A common theme we have heard, however, is that the federal government and other stakeholders are looking to have a successful, long-term introduction of more renewable fuels into the transportation sector.

As we are evaluating your E15 waiver petition, we want to make sure we have all necessary science to the right decision. Although all of the studies have not been completed, our engineering assessment to date indicates that the robust fuel, engine and emissions control systems on newer vehicles (likely 2001 and newer model years) will likely be able to accommodate higher ethanol blends such as E15. However, we continue to evaluate the question of component durability when E15 is used over many thousands of miles and there is an ongoing study being conducted by DOE that will provide critical data on the issue. We are told by DOE that this program involves the complete testing of 19 vehicles to examine the long term emissions impacts of higher ethanol blends on newer motor vehicles, and is expected to be completed by August 2010. Presently, data are available on only two vehicles, however it is expected that testing will be completed on additional 12 vehicles by the end of May. As a result, EPA expects to have a significant amount of the total data being generated through this testing program available to us by mid-June. Should the test results remain supportive and provide the necessary basis, we would be in a position to approve E15 for 2001 and newer vehicles in the mid-year timeframe. Of course, if the data highlight potential problems, then the decision may need to be delayed until all testing is received and reviewed.

In light of the current testing data, the Agency will be taking steps to address fuel pump labeling issues to ensure consumers utilize the proper gasoline for their vehicles and equipment (such as lawn mowers, boats, etc.) should the use of ethanol blends greater than 10 percent be ultimately approved. To that end, we are initiating a process to assess how pump labeling requirements might be extended to fuel distributors. A working group is being pulled together to examine and address labeling issues to allow final labeling requirements to be put in place soon after a waiver decision is made.

In the meantime, we will continue to keep Growth Energy, other stakeholders and the general public informed of the progress and results of the vehicle testing program and the fuel pump labeling evaluation.

Sincerely,

Gina McCarthy
Assistant Administrator

###

Growth Energy Press Release:

Growth Energy Welcomes EPA Letter on E15

Job Creation, Reducing Pollution, National Security at Stake

WASHINGTON, Dec. 1 /PRNewswire-USNewswire/ -- Growth Energy, the coalition of U.S. ethanol supporters that filed the Green Jobs Waiver seeking E15, described as a "strong signal" the Environmental Protection Agency's announcement today that it was preparing to approve E15 upon the completion of ongoing tests early next year.

In response to the Growth Energy Green Jobs Waiver, the EPA has taken a positive step towards higher blends of clean, green, and homegrown ethanol. In EPA's letter, the agency states that its engineering assessments indicate that the "robust fuel, engine and emissions control systems in newer vehicles (likely 2001 and newer model years) will likely be able to accommodate higher ethanol blends, such as E15." The letter notes that increasing the blend wall to E15, as per Growth Energy's request, is a "critical issue" as the nation works toward "long-term introduction of more renewable fuels into the transportation sector."

"This announcement is a strong signal that we are preparing to move to E15, a measure that will create 136,000 new U.S. jobs, cut greenhouse gas emissions and lessen America's dependence on imported oil," said Gen. Wesley Clark, Co-Chairman of Growth Energy.

"While we believe the data included in the Green Jobs Waiver supports raising the blend to E15, critics have called for additional testing. We are confident the ongoing tests will further confirm the data we submitted in the Growth Energy Green Jobs Waiver and silence those critics, allowing for more American-produced energy to enter the market," said Tom Buis, CEO of Growth Energy.

"The Growth Energy Green Jobs Waiver brought to light the issue of the regulatory cap on ethanol and is responsible for moving this process forward. The importance of increasing the blend is now universally understood. Moving to E15 provides much-needed market opportunity for the domestic ethanol industry by adding seven billion new gallons of market potential. This expanded market opportunity is necessary to draw capital investment for cellulosic ethanol and allows the industry to comply with the Renewable Fuel Standard. EPA is also to be commended for its intent to begin the labeling and public education process sooner rather than later; this decision means we could begin to move to E15 as soon as engine testing is completed in the spring. Overall, EPA is making the right choice for our economy, our environment, and our national security," Buis said.

Growth Energy was formed in November 2008. Its top priority was expanding market access for ethanol, and by March 2009, Growth Energy had submitted the Green Jobs Waiver to EPA on behalf of 54 ethanol producers. Since 1978, EPA has approved 11 waivers. The first waiver created the 10 percent ethanol blend. None of the previous 11 waivers approved by EPA was supported by as much independent analysis -- scientific, technical and economic data -- as the Growth Energy Green Jobs Waiver.

About Growth Energy

Growth Energy is a group committed to the promise of agriculture and growing America's economy through cleaner, greener energy. Growth Energy members recognize America needs a new ethanol approach. Through smart policy reform and a proactive grassroots campaign, Growth energy promotes reducing greenhouse gas emissions, expanding the use of ethanol in gasoline, decreasing our dependence on foreign oil, and creating American jobs at home. More information can be found at GrowthEnergy.org.

SOURCE Growth Energy

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