Reactions vary following E15 announcement

By Kris Bevill | September 23, 2010
Posted Oct. 13, 2010

Initial reactions varied following the U.S. EPA's Oct. 13 announcement that it will allow E15 only in vehicle models 2007 and newer. Ethanol industry members cautiously eyed the approval as an indication that there will be continued support for their product, but opinions were split on its immediate impact on the market.

The Renewable Fuels Association has lobbied heavily all year for an E12 waiver for all vehicles rather than a partial E15 waiver and RFA President Bob Dinneen expressed his disappointment over the denial of E12 use. "I find it hard to believe that there is not a level between E10 and E15 at which EPA could approve for use in all vehicles," he said. "An interim step to anything above E10 for all vehicles would have a more immediate impact on the market than today's announcement." The RFA is concerned that partial approval of E15 will create consumer confusion and will do little to increase the ethanol blend wall. Additionally, the RFA stated that two years of federal government testing of E15 has produced no evidence that E15 use would adversely affect older engines. "EPA is providing no scientific justification for its decision to bifurcate the market," he said. "It's almost as though they pulled the number out of a hat. As test after test has demonstrated, E15 is safe and effective in all light duty vehicles."

Growth Energy, which filed the initial E15 waiver petition, said the EPA's partial approval was an "important first step," but stressed that more must be done to push back the blend wall. "Some may view it as a glass half empty, but Growth Energy views it as a glass half full," said CEO Tom Buis. "Every long journey begins with a first step and, today, that step was made." The group said it will continue to urge the EPA to approve E15 for vehicles 2001-2006 and to begin testing for legacy vehicles as well.

"The arguments being made right now against E15 are the same as those made about E10 back in the late 1980s, when I entered the ethanol industry," said Poet LLC CEO Jeff Broin. "Seventy billion gallons later, we have proven those arguments false, just as research on E15 is proving critics wrong today." Poet is set to begin construction on its first commercial-scale cellulosic ethanol production facility as soon as financing is finalized, but during a press conference to discuss the EPA's decision, Broin hinted that Poet may not continue with its project if widespread E15 is not approved, stating that it would not make economic sense to produce a product for which there is no market.

The American Coalition for Ethanol took a neutral stance, stating that the partial waiver is neither a major victory for ethanol nor an unworkable compromise. "ACE views it as a very small step and we will work to try and make the best of it," Brian Jennings, ACE executive vice president, said. "While we are pleased EPA finally made a decision, restricting the use of E15 to 2007 model year and newer vehicles is inadequate and will not sufficiently move the demand needle for ethanol." Jennings contented that the less than stellar result of the long waiver process should prove that the best way to provide ethanol fuel choices is to increase flex fuel vehicle and blender pump availability. "We will also continue to push for the approval of ethanol blends beyond 10 percent in all vehicles, as is supported by volumes of testing and years of real-world experience, and encourage EPA to act more appropriately in the near future to allow all vehicles to use E15," he said.

Small engine manufacturers have historically been opposed to increased ethanol fuel blends and they continue to oppose E15 use. However, Kris Kiser, executive vice president of the Outdoor Power Equipment Institute, which represents most of the U.S. small engine manufacturers, wants to make clear that his organization is not against ethanol. Rather, it merely wants to protect its members from litigation related to misfueling issues. "We're often portrayed as anti-ethanol, but that's not it all," he said. "My guys can make a machine that runs on anything. The challenge becomes, what are we going to be designing to in the future? What's the number? Is it [E]25, is it 20, is it 30?" Kiser said his group has been meeting with members from Growth Energy, the RFA and ACE to discuss problems that could arise from partial higher-blend approval as well as potential courses of action that would provide some predictability for engine manufacturers, such as a planned nationwide increase to E30 during a certain year. Kiser said this type of approach may be more appropriate for producers and manufacturers as well as consumers. "We think this gradual implementation gives the consumer a real challenge in the marketplace," he added.

The National Corn Growers Association said it was disappointed with the scope of the EPA's decision, but pleased that a decision was finally made. "We believe this bifurcation of the approval process, and the labels that are expected to be placed on higher-blend fuel pumps, can lead to general consumer confusion and therefore act counter to the original intent," Bart Schott, NCGA president, stated. "We strongly urge the EPA and the Department of Energy to expedite their remaining testing and cut through bureaucracy to quickly approve the E15 blend for all vehicles. Consumers deserve clarity."

Agriculture Secretary Tom Vilsack, who is scheduled to make another biofuels-related announcement Oct. 21, said the EPA approval will assist in creating jobs in rural America and will allow existing ethanol capacity to enter the market. "Today's action by Administrator [Lisa] Jackson and the EPA provides assurance to farmers, ranchers and the renewable fuels industry that the government backs the use of home-grown energy in our cars and trucks," he said. "At the same time, more work is needed and we hope EPA and the Department of Energy complete an evaluation of 2001-2006 models soon."