The Hagstrom Report

Agriculture News As It Happens

EPA declares 15 percent ethanol safe for 2001 and newer vehicles


Fuel that contains up to 15 percent ethanol is safe for cars and light trucks made since 2001, the Environmental Protection Agency declared this morning.

The decision won praise from farm and ethanol groups, even though EPA faces lawsuits trying to stop E15 and it is unclear when the fuel might become widely available. Raising the allowable level of ethanol from the current 10 percent to 15 percent is expected to increase the market for corn and other source materials for ethanol, including grains and biomass sources such as corn cobs, cornstalks, and switchgrass. The decision means that the E15 fuel could be used in about 60 percent of U.S. vehicles.

Tom Buis, CEO of Growth Energy, the lobbying group that submitted a petition for E15 in March 2009, praised the decision as “a bold move forward, changing America’s energy future for the better,” but in a telephone press conference acknowledged that E15 faces additional regulatory hurdles. Those include EPA’s pending rulemaking process on labeling the fuel to avoid its use in engines for which it has not been proved, fuel registration, and gaining approval from agencies in the states.

The Renewable Fuels Association also praised the decision, but was more reserved in its reaction.

“EPA’s decision today is a sound one, but it doesn’t address the issues that still remain regarding a segmented market place and the introduction of a new fuel,” said RFA CEO Bob Dinneen. “The RFA will continue to work with EPA and other regulatory bodies to expand ethanol use beyond even 15 percent.” RFA has also criticized EPA’s proposed label as too negative, and said it will try to influence the agency to make changes in it.

The National Petrochemical and Refiners Association and other groups have sued EPA trying to stop E15, but Buis declined to comment on whether those lawsuits are likely to slow down its acceptance.

Growth Energy has also proposed that the current system of tax credits and a protective tariff for ethanol be changed to include government support for the construction of blender pumps and flex fuel vehicles, and Buis said today that the E15 decision makes moves in that direction even more important so that consumers will have a choice of fuels.

Anticipating that ethanol opponents in the food versus fuel debate will say that the decision will raise the price of corn used for food, Todd Becker, CEO of Green Plains Renewable Energy, said he believes that the supply of corn may be greater than anticipated, and that index funds and other speculators in the commodity markets are causing the price to go up much more than ethanol demand.

A coalition of food processors, environmental and tax watchdog groups opposed to ethanol issued statements saying that the approval of E15 would raise food prices and damage the environment rather than improve it, and that ethanol fuels are inefficient and subsidies should be ended. The groups included the American Bakers Association, Americans for Limited Government, the American Meat Institute, the Environmental Working Group, Friends of the Earth, the Grocery Manufacturers Association, the International Dairy Foods Association, the National Chicken Council, the National Council of Chain Restaurants, the National Meat Association, the National Taxpayers Union and the National Turkey Federation.

Growth Energy submitted its petition under a Clean Air Act provision that allows EPA to waive the act’s prohibition against the sale of a significantly altered fuel if the petitioner shows that the new fuel will not cause or contribute to the failure of engine and other emission-related parts that ensure compliance with air quality standards.

In formal terms, EPA “waived a limitation on selling gasoline that contains more than 10 percent ethanol for model year 2001 through 2006 passenger vehicles, including cars, SUVs, and light pickup trucks,” the agency said in a news release. The agency also announced that no waiver is being granted this year for E15 use in any motorcycles, heavy-duty vehicles, or non-road engines, as current testing data does not support such a waiver.

EPA Administrator Lisa Jackson made the decision after a review of the Energy Department’s “thorough testing and other available data on E15’s effect on emissions from [model year] 2001 through 2006 cars and light trucks,” the agency said. EPA had earlier issued a waiver for vehicles from 2007 and later.

“Recently completed testing and data analysis show that E15 does not harm emissions control equipment in newer cars and light trucks,” Jackson said. “Wherever sound science and the law support steps to allow more home-grown fuels in America’s vehicles, this administration takes those steps.”

But opposition to the commercialization of E15 for vehicles is likely to continue. A bipartisan group of senators recently wrote Jackson criticizing the decision to allow E15 in vehicles made in 2007. The senators said that allowing a fuel that can be used only in some engines would create confusion among consumers, and that their constituents had experienced trouble using E10 in older cars, snowmobiles, boats and lawnmowers.