Court approves higher ethanol content in fuel

08 17, 2012 by The Hill

A court decision Friday that upheld a measure letting U.S. automobiles use gasoline with a higher ethanol content has rankled the oil industry its Republican allies even as the biofuels industry claimed a crucial victory.

The U.S. Appeals Court of the District of Columbia ruled gas retailers could offer E15 fuel — a 15 percent ethanol-to-traditional-fuel blend — for cars made in the 2001 model year or later if they follow a set of Environmental Protection Agency (EPA) guidelines. That means two-thirds of the vehicles on the road today can now use E15, said the Renewable Fuels Association (RFA), a biofuels industry group.

“Adding an E15 option along side E10 and higher ethanol blends allows consumers to make the fuel decisions that work best for them and their vehicle,” RFA CEO Bob Dinneen said Friday in a statement. “Ethanol has a thirty year track record of safe and effective use in the market place and that record will continue.”

EPA first issued the guidelines in March 2009, as the auto and refining industries were unsure whether engines could handle the potentially more corrosive fuel. Meeting those guidelines earns fuel makers and sellers a partial waiver to use the fuel.

Those guidelines require fuel manufacturers to register the blend and let gas station operators sell E15 fuel by requiring them to ensure filling pumps properly convey what kinds of vehicles can handle it.

The American Petroleum Industry (API) has strongly opposed E15. It contends the fuel damages engines, and that major U.S. automakers will not honor warranties for wear and tear caused by E15.

“Today’s court decision is a big loss for consumers, for safety and for our environment,” Bob Greco, API downstream group director, said Friday in a statement. “EPA approved E15 before vehicle testing was complete, and we now know that the fuel may cause significant mechanical problems in millions of cars on the road today.”

Republicans also wonder whether anyone really wants to sell E15. Currently, just one fueling station in the nation offers E15 at the pump.

Both API and Republicans have taken shots at the EPA’s renewable fuel standard (RFS), which requires refiners to blend 13.2 billion gallons of corn ethanol into traditional transportation fuel this year. They say it buoys a market that would not exist without government support.

"My constituents in Oklahoma want to be able to use fuel compatible with their vehicles, without having to worry about what kind of damage higher blends of ethanol will do to their engines," Sen. James Inhofe (R-Okla.), the ranking member on the Senate Committee on Environment and Public Works, said Friday in a statement. "This ruling just enables EPA to continue pushing too much corn ethanol too fast through the Renewable Fuel Standard."

Environmental groups are concerned E15 could strain corn supplies and boost costs for that staple crop. They claim that because so-called advanced biofuels — those that are produced from non-food products — are not yet commercially available, refiners will rely on corn to fill the gap between E10 and E15.

But biofuels groups say that is changing. Last week, EPA awarded a Florida biofuels plant with the nation’s first permits to manufacture and sell advanced biofuels at commercial scale.

The biofuels industry maintains that shooting for the E15 target will help expedite some of that advanced biofuels commercialization. They add that the E15 blend will make it easier to hit the RFS quota of blending 21 billion gallons of advanced biofuels into traditional fuel by 2022.