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Year-round E15 sales seems to be on track for June 1 approval
 

By JORDAN STRICKLER

WASHINGTON, D.C. — With the comment period recently wrapped up for the U.S. EPA’s year-round E15 sale draft proposal, everything looks to be on track for a June 1 approval; however, not all reviews of the rule have been positive.

In a letter to EPA Administrator Andrew Wheeler, National Farmers Union (NFU) President Roger Johnson voiced his concerns over specific language in the rule he believes could amount to a cap on ethanol.

“Farmers Union is eager for EPA to follow through on its promises to get an E15 waiver out of the door by June 1. But we are concerned that certain provisions within EPA’s rulemaking unnecessarily work against expanded use of higher level blends of ethanol,” he stated.

The NFU’s concerns stem from EPA’s interpretation of the “substantially similar” clause of the Clean Air Act, which prohibits the sale of any fuel or fuel additive that is “not substantially similar” to fuel or fuel additives used in the certification of new vehicles.

In 2017, E10 – petroleum gasoline blended with 10 percent ethanol – became the nation’s certification fuel, making higher level blends of ethanol, like E15 and E30, substantially similar. Yet Johnson said in the EPA’s proposal, the agency has limited its “substantially similar” interpretation to only an E15 blend, making the prospects of using higher-level blends of ethanol more difficult to achieve.

“Unfortunately, EPA’s substantially similar determination is limited to E15,” he said. “While we do not necessarily disagree with EPA’s interpretations that would allow for E15 year-round, we believe the statute clearly allows for higher ethanol blends as part of the substantially similar determination based on E10 certification fuel.”

While the Renewable Fuels Assoc. (RFA) doesn’t necessarily agree with Johnson’s opinion, it does think the proposal does have a few negative attributes.

“It’s always been our assumption that this rule would be focused on E15 specifically, so we don’t necessarily think that this rule closes the door on higher-level blends down the road,” said RFA President and CEO Geoff Cooper. “We think there will be better opportunities down the road to get the approval of higher blends like E20 and E30 later.

“E15 has been our goal since the beginning, so we don’t really share the view that it would close the door on higher blends.”

Cooper’s concern, however, lies with the ability for gas stations to blend their own ethanol. Currently the rule effectively proposes to prohibit any gas stations from making E15 on site that use natural gas to create the mixture.

“If the E85 that they would be using contained natural gas liquids, and if we look at the 600 to 700 retails stations currently selling E15, a majority of those stations are using blender pumps to make it. Many of those are using E85 mixed with E10,” he explained.

“Much of that E85 contains natural gas liquids. So if EPA ended up finalizing that piece of the proposal, it would create some challenges for existing E15 retailers. They would have to change the way they make E15.”

But he is optimistic the deadline is attainable. “We do remain confident that these regulatory fixes will be done by June 1. I was meeting with the EPA (last) week and they reassured us again that this is going to get done before June 1, and that they have every intention that they will honor the President’s commitment to have this before summer driving season starts.”

A move to E15 comes at a critical time for farmers. A report released by the USDA on March 6 projects annual farm income at $69.4 billion; if accurate, this would be the third time since 2015 that income would not exceed $70 billion. This is far below levels earlier this decade, when a seven-year commodity boom propelled income once to a record $123.4 billion.

“It is crucial for the EPA to get the rule out by June 1, so that our retailers can sell E15 all year, everywhere in the U.S.,” wrote Nebraska Ethanol Board Chair Jan tenBensel in a comment to the EPA. “This change has the potential to create significant new demand for ethanol, which is a key value-added agriculture market for farmers in Nebraska, and so important at this time of an ongoing downturn in agriculture and uncertain global trade.”

The move to year-round E15 is expected to be beneficial to customers at the pump. The University of Illinois Department of Agricultural and Consumer Economics calculated that increasing the use of ethanol to 10 percent in gasoline saved U.S. consumers $7 billion between 2008-16.

5/15/2019