E15 soon E50 Coming?
From Power Equipment Trade 4/11 edition
Fuel News: New Regs, Pushback, Record Year
The U.S. Environmental Protection Agency (EPA) is moving ahead with developing new regulations for the sale of E15 gasoline as standard transportation fuel, and ethanol producers celebrate a record year of production in 2010 while some in Congress and other groups are working to cancel, slow or alter the agency’s move to approve a 50% increase in allowable ethanol in standard gasoline.
According to EPA officials, the government will finalize in a few months the labels on the gasoline pumps, which are designed to protect consumers from using E15 in unapproved engines, the head of the EPA recently told Congress. "We are now in the process of completing a rule that will establish national labeling," EPA Administrator Lisa Jackson told a Senate hearing. "We expect to issue a final rule in the next few months."
Jackson also said the EPA will officially register E15 this spring, which is required under the Clean Air Act before the fuel can be sold. The agency recently received emissions and health information to support the registration application for E15. "We expect to complete our review of that information in two to three months," she said.
That means E15 will likely be available nationwide this summer, according to industry officials. EPA approved E15 for vehicles 2007 and newer last fall, and in January extended approval to all vehicles built since 2001. There are now more than 150 million cars and trucks on the road that could use it, which represents 74% of U.S. gasoline consumption.
Meanwhile a pair of U.S. senators introduced a bill to repeal a controversial tax credit given to companies that blend ethanol into gasoline. Critics of the tax credit say the subsidy, along with federal mandates to increase ethanol usage, are the only reasons ethanol is competitive in the marketplace.
The lawmakers say the tax credit should be eliminated because federal law already requires blenders to put ethanol into gasoline, thereby eliminating the need for financial incentives. The Volumetric Ethanol Excise Tax Credit provides a 45 cents/gal. tax credit to ethanol blenders. Last year, Congress decided to extend the tax credit until the end of 2011. In 2010, the tax–credit program totaled $5.4 billion, according to the Government Accountability Office.
The federal renewable fuel standard requires the use of 36 billion gallons of renewable fuels by 2022, with or without the tax credit.
Meanwhile, in the U.S. House, the new Republican majority (and more than a few Democrats) passed an amendment that would block EPA from using funding this fiscal year to implement the E15 approval process.
According to amendment sponsor Rep. John Sullivan, R–Okla., the legislation prevents consumer confusion at the pump and protects the engines of vehicles and outdoor power equipment. “My amendment ensures consumer safety, plain and simple. The EPA has completely ignored calls from lawmakers, industry, environmental and consumer groups to address important safety issues raised by the 50 percent increase in the ethanol mandate issued over the past year,” he said, adding, “Putting E15 into our general fuel supply could adversely impact up to 60 percent of cars on the road today, leading to consumer confusion at the pump and possible engine failure in the cars they drive.”
Sullivan said the EPA decisions can also negatively impact marine and other non–road engines such as boats and lawnmowers. “My amendment put the brakes on E15 for the rest of the fiscal year, giving Congress time to address these questions and ensure consumer safety at the pump,” he said.
A lobbyist for refiner Tesoro Corp., which opposes the higher ethanol blends, believes the amendment signals a shift in Congress’ stance toward the fuel.
“The adoption of the Sullivan amendment hopefully signals a new trend in rational thinking on what the proper role is for corn ethanol in our country’s renewable fuel mix,” said Stephen Brown. “This was not a vote against corn ethanol per se but more an indication that folks want to see a whole lot more analysis and thought before we fall further into the corn abyss,” he added.
Despite the pushback in Congress, according to data from the U.S. Energy Information Administration, 2010 was another record year for American ethanol producers. Daily ethanol production averaged nearly 863,000 barrels representing nearly 13.23 billion gallons of production for calendar year 2010. That’s a 23% increase over the 2009 production level of 10.75 billion gallons.
Total ethanol exports ended the year at 397 million gallons, marking a nearly four–fold increase over 2009. A record volume of 9 million metric tons of distillers grains was also exported in 2010.
Scott
