US EPA ‘dropping the ball’ on higher blends, says ethanol group

18 June 2010 18:36  [Source: ICIS news]

HOUSTON (ICIS news)--The US ethanol industry on Friday blasted the US Environmental Protection Agency (EPA) for further delaying a decision on higher ethanol blends that the sector claims are needed to avoid a glut in the market.

The delay was a disappointment and a dereliction of duty, said the Renewable Fuels Association (RFA), one of the main ethanol lobbying groups in the US.

The ethanol industry is pushing for the government to authorise blending of up to 15% (E15) to create additional demand and absorb growing production of the biofuel.

The US now restricts blending to 10% (E10), which limits the US ethanol market to around 13bn gal/year. US ethanol production last year totalled 10.8bn gal and output in 2010 could hit 13bn gal.

The increase in the blend volume is a controversial issue, as opponents claim more ethanol in gasoline could interfere with vehicle performance and potentially void vehicle warranties.

The ethanol industry disagrees with that view, saying its own testing has shown higher blends to be safe.

“EPA is dropping the ball and for no scientifically justified reason,” said RFA president Bob Dinneen, who derided a plan by the regulator to initially only approve higher blends for newer vehicles.

The EPA had been expected to make a decision on E15 in July, but the regulator said an announcement would not be made until the end of September when testing on vehicles built after 2007 was completed.

The regulator said it would make separate decisions on vehicles made in 2007 and later and on vehicles made as early as 2001.

 “While initial plans to approve the use of E15 for only 2001 and newer vehicles were bad, this plan borders on shameful,” Dinneen said, claiming EPA would confuse consumers by splitting the market.

Allowing higher blends would mean a potential increase of 6.5bn gal/year of new ethanol demand, displacing more than 200m additional barrels of imported oil, the RFA said.

The group claimed the delay by the EPA showed a disconnect between the regulator and President Barack Obama, who this week renewed calls for the US to reduce dependence on oil in the wake of the massive spill in the Gulf of Mexico.

The RFA further charged that equally frustrating was the EPA’s failure to consider calls to immediately approve the use of 12% ethanol blends (E12).

Existing oxygenate stacking rules would allow for it, the group said, adding that regulations already permit the addition of up to 2% methyl tertiary butyl ether (MTBE) on top of the currently allowed E10.

As ethanol and MTBE are both oxygenates, this additional 2% volume could be ethanol, the RFA said, claiming a vehicle engine would not react differently if the oxygen content was from one fuel or two.

MTBE was phased out of US gasoline in 2006 after Congress refused to exempt producers from liability over potential spills.

The RFA contends that an approval of E12 is justified and needed as an interim step to E15.

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By: William Lemos
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