AFPM '12: New E15 rule unlikely to boost US ethanol ­– broker

02 April 2012 23:58  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--A new US rule allowing gasoline blends of up to 15% ethanol is unlikely to increase demand for the biofuel because of concerns about liability, a broker said on Monday.

The US Environmental Protection Agency (EPA) will now allow blends of up to 15% ethanol (E15) for automobiles with model years of 2001 and newer.

However, the rule is not a mandate requiring blends of up to 15%. It simply gives service stations the option to sell the blends.

Several stations will unlikely sell the higher blends because of concerns about liability, said J Robinson, a broker with West End Energy.

He made his comments on the sidelines of the International Petrochemical Conference (IPC), hosted by the American Fuel & Petrochemical Manufacturers (AFPM).

The owners of the service station could void the warranty on the fuel pumps if their equipment cannot handle the higher blends of ethanol, Robinson said.

In addition, the service station could purchase a batch of fuel with an ethanol content marginally higher than 15%, he said. The higher blends could damage vehicles, leaving the service station potentially liable.

"All it would take is one poorly blended batch," Robinson said.

Also, drivers could mistakenly put the E15 fuel in automobiles made before 2001, Robinson said. Again, service stations could potentially be liable if those automobiles are damaged.

"The gasoline-station owners are going to say: 'Am I going to put 15% ethanol-blended gasoline into my pumps and run the risk of getting sued by a consumer?'," Robinson said.

In addition, relatively few service stations can handle the E15 blends, making it unlikely that they will purchase the fuel, Robinson said.

"The issue is really going to be demand for the fuel," he said. "I don't see demand for E15 really being there."

The IPC runs through Tuesday.

By: Al Greenwood
+1 713 525 2645

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