The EPA has granted a waiver to raise the amount of ethanol allowed in a gallon of gasoline from 10 percent to up to 15 percent (E15). However, the increase applies only to 2007 (or newer) model cars and light trucks.

The move is interpreted by many as an attempt to placate all sides in the debate. If, indeed, that was the agency’s intention the immediate reaction shows few are happy with their half of the split baby.

“To eliminate opportunities for (improper) fueling, EPA is also proposing a program to properly label fuel pumps that dispense E15,” said Gina McCarthy, EPA assistant administrator for Air and Radiation.“This would include a requirement that the fuel industry specify the ethanol content of gasoline they sell to retailers. There would also be a quarterly survey of retail stations to help ensure their gas pumps are properly labeled.”

For more, see EPA/E15

The decision, said McCarthy, “was reached by Lisa Jackson, EPA Administrator, after review of the Department of Energy’s (DOE) extensive testing and other available data on E15’s impacts on engine durability as well as emissions. That’s exactly what the Clean Air Act requires us to do.

“That testing has found that E15 is safe to use on model year 2007, and newer, vehicles. For other model years and types of vehicles, we’ll need more time to gather and assess the necessary data.”

For model year 2001 through 2006 vehicles, “we expect a decision on the use of E15 will be made after EPA receives the results of ongoing testing at the DOE. That is expected to be complete in November…

“On earlier vehicles, we have concerns from an engineering perspective about the design. We have questions about whether E15 will be compatible and that’s why we need additional test results.”

For more, see tardy decision

Why didn’t the EPA simply wait until the DOE testing was finished and release the whole rule?

“Because,” said McCarthy, the EPA decision “has been a fairly long period of time (in coming) and the law asks us to make these decisions fairly expeditiously.”

Lukewarm to the EPA decision, Bart Schott, farmer and NCGA President strongly urged “the EPA and DOE to expedite their remaining testing and cut through bureaucracy to quickly approve the E15 blend for all vehicles. Consumers deserve clarity.”

Livestock and poultry industry representatives have been very vocal in opposing the E15 move. Already facing skyrocketing corn prices (expected to reach at least $6 per bushel), they warn feed costs are already prohibitively expensive and the E15 rule will exacerbate the situation.

For more on the corn market, see market

In response to the EPA announcement, George Watts, National Chicken Council President, said “Rising grain prices driven by the voracious demand for feedstock from the heavily subsidized ethanol industry caused an increase of six percent in the retail price of fresh whole broiler chickens from 2008 to 2010. Channeling even more corn into ethanol will, in time, only drive up the cost of chicken even more. Consumers will end up paying for the ethanol industry’s demands.”

Was the EPA’s move to limit the E15 rule to 2007-and-newer vehicles done with an eye towards the corn market?

“Not at all,” insisted McCarthy. “We simply look at the fuel itself, the emissions and engine durability issues. That’s what the Clean Air Act establishes for our criteria.”

On the flipside, Schott said the National Corn Growers Association is “disappointed in the very limited scope of this approval, but pleased the EPA has finally taken action to partially approve the waiver request to allow higher blends of ethanol in some motor vehicles. We believe this bifurcation of the approval process, and the labels that are expected to be placed on higher-blend fuel pumps, can lead to general consumer confusion and therefore act counter to the original intent.”

The EPA decision leaves some states aggressively pushing for E15 with more questions than answers. An example: Minnesota, where the legislature has mandated the use of E15. However, that mandate is conditional based on the federal government clearing E15 for use. How does the EPA address such states?

“Part of the reason we wanted to get this decision out is the federal government isn’t the only entity with the ability to make decisions to … advance E15,” said McCarthy. “One of the signals we’re trying to send is that while we’ve made this waiver decision, there are many others that need to be made – many at the state level.”

Minnesota and other states must “look at their legislation and regulations. Decisions will need to be made about compatibility with underground storage tanks, testing on dispensing units, fuel certification…

“This is a step forward. I hope it sends a signal to states wanting to use E15 to take a look at their laws and regulations and what decisions they need to be gearing up to make.”

Agriculture Secretary Tom Vilsack saw positive movement in the EPA’s announcement saying it “is an important step toward making America more energy independent and creating much-needed jobs in rural America. The announcement will help get existing ethanol capacity into the market.”

Not so fast, said those in the ethanol industry.

“EPA’s scientifically unjustified bifurcation of the U.S. car market will do little to move the needle and expand ethanol use today,” said Bob Dinneen, Renewable Fuels Association President and CEO. “Limiting E15 use to 2007 and newer vehicles only creates confusion for retailers and consumers alike. America’s ethanol producers are hitting an artificial blend wall today. The goals of Congress to reduce our addiction to oil captured in the Renewable Fuels Standard cannot be met with this decision.”

The decision “continues to leave the market artificially constrained and further limits market opportunities for next generation biofuels very close to commercialization,” said Dinneen. “While we appreciate the work put into this waiver request, especially the two-plus years of testing by the Department of Energy, it is clear EPA is missing an opportunity to meaningfully increase America’s use of renewable fuels and reduce our dependence on imported oil.”