Study warns of higher US ethanol fuel blends

31 August 2010 23:30  [Source: ICIS news]

WASHINGTON (ICIS)--US oil and natural gas producers and refiners on Tuesday issued another warning against premature federal approval of a higher ethanol fuel blend, but biofuel sector officials dismissed claims of major market disruptions.

The American Petroleum Institute (API) said a study it commissioned indicates that state and local governments and regulatory agencies would be unprepared to implement a higher ethanol fuel mix mandate if federal officials should issue such an order.

The Environmental Protection Agency (EPA) is scheduled to decide before the end of September whether to approve an increase from the current 10% ethanol blend in US gasoline supplies, known as E-10, to a 15% mix or E-15.

US ethanol trade group Growth Energy and 54 other biofuel producers petitioned the EPA in March 2009 to raise the blend level to E-15, saying it is crucially necessary to sustain non-fossil alternative fuels development and to help wean the US from foreign-sourced oil.

The API and the National Petrochemical & Refiners Association (NPRA) along with other energy, agriculture, foods producers and environmentalist groups have long argued against a higher ethanol blend mandate.

Opponents argue that the US fuels distribution system is ill-prepared to handle the higher E-15 blend and that it could cause operational and safety problems for older US cars and off-road and marine gasoline engines.

In the study issued on Tuesday, API said that Sierra Research found that multiple regulatory and legal requirements at local levels must be met before EPA can rightly issue a higher blend mandate.

“There are many changes that need to be made to federal, state and local requirements as well as issues with vehicle warranties and the country’s fuel distribution and marking infrastructure," said Jim Lyons, senior partner at Sierra Research.

“EPA needs to recognise and consider these issues in addition to waiting for all of the emissions and performance data to be collected,” Lyons added.

Earlier this month, API and other members of the E-15 opposition warned that the EPA and the Department of Energy (DOE) cannot possibly complete by the end of September extensive scientific studies yet to be done on the environmental, energy and safety questions related to E-15.

The opponents of E-15 called on Congress to hold immediate hearings about the EPA and DOE decision process on the petition.

But Growth Energy chief executive Tom Buis charged that API and others are putting the cart before the regulatory horse.

“In order for state laws and regulations regarding fuel specifications to be updated, the fuel must first be approved by the EPA,” Buis said.

He said that the petition that Growth Energy and other ethanol producers submitted to the EPA contained “a sound body of science that overwhelmingly supports the use of E-15 in existing vehicles”.  He also said that “there has been more testing of E-15 than there has been of any other fuel additive in the history of the EPA waiver process”.

Matt Hartwig, spokesman for ethanol fuels trade group Renewable Fuels Association (RFA), also dismissed the latest energy sector warnings about E-15.

“Ethanol is a safe and proven fuel and big oil knows it,” Hartwig said.

He said the new API-funded study “is simply the final flailing of a dying attempt to limit ethanol’s role in the market”.

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