US delays decision on major ethanol fuel blend boost

18 June 2010 17:45  [Source: ICIS news]

US delays decision on E15WASHINGTON (ICIS news)--The US government will delay until October this year a long-awaited decision on whether to boost the blend ratio of ethanol in retail gasolines to 15%, federal environmental officials said on Friday.

The announcement was hailed by the US refining industry as “an excellent decision that will protect the American people”.

But the US ethanol industry said it was disappointed and regards the delay as unacceptable.

The Environmental Protection Agency (EPA) had earlier indicated that it expected to rule on the higher blend request by the middle of this year, which would be approximately this month.

But the EPA said on Friday that it cannot make a decision now on a petition to boost the US ethanol/gasoline fuel blend from its current 10% mix - known as E-10 - to the higher 15% or E-15 level that American ethanol producers have requested.

The EPA said it must await automotive engine and exhaust testing being done by the Department of Energy (DOE), which is scheduled to be completed by the end of September.

The Energy Department is running tests on automobiles manufactured after 2007 to see if the higher E-15 ethanol blend will cause stalls, inhibit the performance of exhaust system catalytic converters or otherwise damage the engines or performance of newer automobiles.

“DOE is also testing some vehicles built before 2007 and is also testing [retail gasoline station fuel] tanks and other fuel handling equipment to see how they might be affected by E-15,” the EPA said.

“While the results from the tests conducted to date look good, the EPA will not make a final decision until the DOE completes its current comprehensive testing of the newer vehicles,” the agency said.

However, the EPA indicated that it is preparing for a decision to mandate the higher E-15 blend, saying that it is “taking steps to ensure the appropriate pieces are in place should the results of the complete set of tests be positive”.

“Based on DOE’s schedule, EPA believes it will be able to make a final determination on whether to approve the use of higher ethanol blends this fall,” the agency said, referring to the fourth quarter this year.

Growth Energy, the ethanol trade group that petitioned the EPA in March 2009 to quickly order nationwide use of E-15, said that the agency’s postponement is unacceptable, noting that the EPA “made a promise in writing that the decision would be made by the middle of this year”.

The US ethanol industry, which is based almost wholly on corn ethanol, has been struggling, troubled by low prices and bankruptcies. Some industry officials regarded the E-15 mandate as essential to the financial survival of US biofuels.

In a letter to President Barack Obama, Growth Energy chief executive Tom Buis asked that he order additional staff, extra work shifts “or whatever other steps necessary to accelerate the completion of the testing”.

He also urged Obama to support federal legislation that would require that all US-made automobiles be flexible fuel vehicles (FFVs) that can accommodate E-15 blends and higher and that would require gasoline retailers to install E-15 blender pumps. Buis said the situation requires “immediate action”.

However, the National Petrochemical & Refiners Association (NPRA) said the EPA delay of its E-15 ruling to October “is an excellent decision”.

NPRA president Charlie Drevna, who earlier had warned that a federal E-15 mandate could force shutdowns of some US refineries, said that the EPA decision on the higher ethanol blend should be guided solely by science and the DOE’s research.

The federal government “should make safety its top priority and require additional testing before recommending whether to allow ethanol levels of up to 15% in gasoline”, Drevna said.

“Switching to higher ethanol blends without statistically valid and conclusive testing would cause serious problems with both the performance and safety of vehicles and equipment powered by gasoline,” he added.

“It’s important that EPA make its decision based on accurate and complete scientific testing,” Drevna said, “and not on lobbying and political arguments by those who stand to benefit financially by big increases in ethanol consumption.”

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