Washington, DC, is No Longer an Option

FROM THE DECEMBER ISSUE: Mid-level blends are the future of the ethanol industry, and the U.S. government can't be trusted to promote their use.
By Dave VanderGriend | November 18, 2019

As the ethanol industry continues using countless resources challenging attacks against the Renewable Fuel Standard, a dark cloud has formed receiving little attention but having a crippling impact on the ethanol industry’s ability to move to higher blends.

An overlooked provision in the recent rule allowing year-round sales of E15 caps ethanol blends at 15 percent by making it illegal for blender pumps to dispense any higher blend other than E15 or E85. According to the U.S. EPA, anyone dispensing E20, 30 or higher would be exceeding the amount of a fuel additive allowed under the Clean Air Act. Mind you, this includes dispensing the fuel into a flex-fuel vehicle designed and marketed as being able to run on any combination of gasoline or ethanol up to 85 percent.

If you believe that mid-level ethanol blends are the future of our industry, this news should cause great concern. EPA’s addition of this provision to the E15 rule does not appear accidental, but rather a carefully designed definition capping ethanol’s growth. Just another example of government control meant to determine—despite the facts—what’s best for the American consumer. Shouldn’t our government work for a free market rather than against?

Not only is EPA working to discourage a free market for consumer fuels, but now politicians, our elected officials, have determined ethanol is better used as a political bargaining chip. Need evidence? Look no further than the recent chaos surrounding small refinery exemptions. Subject to the whims of politicians and regulators, I can’t imagine a more unstable foundation. Can ethanol survive much longer so heavily reliant on Washington, D.C.?

From my perspective, a dependence on top-down solutions, or government enacted plans, rests on the troubling idea that a politician or agency regulator knows what is in our industry’s best interest. Political tools are limited, and government agencies are often agenda-driven. The ethanol industry’s overemphasis on both is, in part, responsible for a polarizing environment making it nearly impossible to accomplish anything. Ethanol is asking way too much from government.

Rather than relying on top-down solutions, growing our industry requires a bottom-up approach: growing demand locally and relying less on politicians and EPA. We have the most economic and climate-friendly source of octane that consumers will buy if given the chance. Why am I so confident?  Because it’s happening here in Wichita, Kansas.

Locally, a chain of convenience stores has installed blender pumps selling mid-level blends in addition to E10 and E85. Consumers are responding by purchasing nearly as much E30 as E10, resulting in 2.5 times more ethanol sales compared to E10-only retailers. This is game-changing. And a bottom-up strategy, no less.

Hopefully my colleagues recognize just how crucial it is that EPA fixes the ban on mid-level blends. And more important, I hope our industry starts spending more resources on bottom-up solutions instead of top-down government plans. Our highest value is providing clean, high octane in a low-carbon fuel. A move to mid-level blends to provide any meaningful octane boost and replace toxic aromatics is a must. It’s up to the industry to get us there, not the government.

Author: Dave VanderGriend
President, Urban Air Initiative