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Iowa Groups Say E15 Decision Is Small Step in Right Direction

Iowa Groups Say E15 Decision Is Small Step in Right Direction

Don't expect to see many gas stations offering E15 blend right way. It will take awhile for retailers and the ethanol industry to get geared up.

On Wednesday, October 13 officials of the U.S. Environmental Protection Agency is Washington announced that EPA has granted a waiver to allow the use of 15% ethanol in unleaded gasoline for non-flex fuel vehicles. The waiver is for model year 2007 and newer vehicles. EPA also announced a separate proposal being put forward by EPA concerning labeling.

"To eliminate the chances of misfueling, getting the E15 fuel in cars that are not cleared to use it legally, EPA is proposing a program to properly label fuel pumps that dispense E15," says the agency's assistant administrator Gina McCarthy. "This would include a requirement that the fuel industry specify the ethanol content of gasoline they sell to retailers. There would be a quarterly survey of retail stations to help ensure their gas pumps are properly labeled."

McCarthy says testing is continuing on older vehicles, those made from 2001 to 2006, and a decision on whether the waiver will be extended to those vehicles will be made after testing is completed in November.

Don't expect to see much E15 fuel at gas station pumps soon

"The EPA's decision to approve the 15% blend of ethanol with unleaded gasoline, increasing the limit from 10% for motor non-flex fuel vehicles of the 2007 model year or newer, is a step in the right direction, but it's not a big step," says Monte Shaw, executive director of the Iowa Renewable Fuels Association.

"We don't expect to see E15 at very many gas stations very soon," he adds. Gas station industry officials say they don't expect the higher blend to be ready until the first quarter of next year. And they worry about confusion at the pumps as motorists try to figure out which pump to use. Most major gasoline retailers, such as Iowa-based Kum & Go stores, have said they will wait to determine market demand before going to the expense of installing new pumps and tanks.

EPA is expected to rule in November or December on allowing E15 to be used in cars from the 2001 model year or newer, which would make more than 55% of the U.S. vehicle fleet eligible for E15 use.

EPA's decision does little to increase ethanol demand

Iowa Secretary of Agriculture Bill Northey issued the following statement: "Iowa is the nation's largest ethanol producer, with about 4 billion gallons of the 12 billion gallons produced in the U.S. each year. The state has 40 active ethanol plants."

He adds, "While this EPA decision is good news and is a step in the right direction, it actually does very little to increase ethanol demand or usage. Until E15 is approved for more vehicles it is unlikely that it will be available as widespread as it should be. I believe the science is there to approve E15 for more vehicles and I hope EPA moves forward with that decision quickly."

While ethanol producers say the often-delayed EPA E15 decision finally made by the agency last week is a good step, advocates for the livestock industry and food processing industries criticized it and expressed concern that it would lead to a further increase in their costs on top of a 60% rise in corn prices since June.

Livestock groups critical of EPA's decision to allow E15

Patrick Boyle, president of the American Meat Institute, says "It is unfortunate that EPA acted hastily and approved the use of E15, and now the American consumer will pay for it at the grocery store."

An official with the National Pork Producers Council, based in Des Moines, said: "We don't want a repeat of a couple of years ago when, due mostly to high feed-grain prices, pork producers lost an average of almost $24 a hog from October 2007 through March 2010. In total the hog industry lost nearly $6 billion."

The ethanol industry requested the increase to E15 from E10 because it has reached the maximum allowable production of 12 billion to 13 billion gallons of ethanol annually for the estimated 130 billion gallons of gasoline consumed each year in the United States. Iowa produces about one-third of the nation's ethanol.

The National Cattlemen's Beef Association says EPA's E15 decision is "a step in the wrong direction." NCBA president Steve Fogelsong, an Illinois beef producer, says "Ethanol production is significant to the cattle industry because of its impact on feed grain prices. NCBA's members strongly oppose mandated production and increasing government intervention that artificially inflates the cost of feed ingredients. This E15 waiver is a step closer to more government mandates."

Broin: EPA decision is positive first step toward opening market

Jeff Broin, chief executive of Poet, the nation's largest ethanol producer, headquartered in Sioux Falls, says the EPA E15 decision announced this past week would make it easier to go ahead with Poet's planned cellulosic ethanol plant at Emmetsburg in northwest Iowa. That plant will produce ethanol from corncobs and light stover, the first non-corn grain ethanol plant in the nation.

Broin says: "Approval of E15 for use in 2007 and newer vehicles is a positive first step toward opening the market for more ethanol to compete with gasoline. However, EPA must move quickly to take the next step and approve E15 for use in older vehicles. The arguments being made right now against E15 are the same as those made about E10 back in the late 1980s, when I entered the ethanol industry. Seventy billion gallons later, we have proven those arguments false, just as research on E15 is proving critics wrong today.

"Greater market access will help give investors the needed confidence to commit to bringing cellulosic ethanol to commercial scale production. Many projects, Poet's Project LIBERTY at Emmetsburg among them, are ready for commercialization but are being hindered by unnecessary limits on the ethanol content that is legally allowed in fuel."

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