What's Left

The industry inches E15 closer to the marketplace
By Kris Bevill | May 10, 2012

Earlier this year, the entrance of E15 into the marketplace seemed as elusive to the ethanol industry, even to believers, as the pot of gold at the end of the rainbow—and no one would openly predict a time frame for it. But the ethanol industry does not give up or back away from hard work, and in early March, the perseverance of those who spent nearly three years wading through the mire of fuels regulations began to pay off. With a series of approvals from the U.S. EPA related to the sale of E15, by late April, it appeared that consumers in at least a few states would soon, finally have the ability to fill their 2001 and newer vehicles with the fuel blend.

Lengthy List
Although the EPA issued the second of its two-part E15 waiver decision in 2009, the approval brought forth a lengthy checklist of items that had to be accomplished before the fuel could be legally sold. Technical experts at the Renewable Fuels Association, led by Kristy Moore, vice president of technical services, took those challenges in stride and began working to resolve them even before the EPA issued its final E15 approval.

Labels
The first item on the list to be cleared was the creation of the dispenser label, which the EPA finalized a year ago. Opponents, who filed a lawsuit challenging the ruling in September, claim the label is insufficient but at a recent House Energy and Commerce subcommittee hearing, a representative from the National Association of Convenience Stores admitted that the E15 label is about an inch larger than any other fuel label and will be difficult to miss on a pump. The labels play a key role in the EPA’s plan to mitigate consumer misfueling and are required to be displayed on every E15 pump.

Misfueling Mitigation Plan
The next big victory came this March, when the agency approved a model Misfueling Mitigation Plan for E15 submitted by the RFA that companies can use to demonstrate compliance of E15 regulations, including labeling of dispensers, documenting fuel transfer and completing compliance surveys.

Fuel Surveys
Companies must pay for samples of E15 and other surrounding fuels to be tested for ethanol content and Reid vapor pressure (RVP) every year and verify the correct placement of required E15 labels. The RFA, in conjunction with the Reformulated Gasoline Survey Association and other obligated parties, developed a sample survey that was submitted and approved shortly after the model MMP. On April 23, the RFA announced that 99 ethanol producers, representing 60 percent of the total U.S. ethanol capacity, had ponied up the money to fund the fuel survey, even though retail stations will be the actual participants. “The ethanol industry wasn’t required to pay for [the fuel survey], but if it was to get done so that E15 could be offered, it fell upon the ethanol industry to pay for it,” says Matt Hartwig, RFA communications director. The funding will pay for more than 7,500 fuel samples to be collected from retailers nationwide and tested by the Reformulated Gasoline Survey Association for ethanol content. If E15 is detected in the samples, the association will verify that those retailers are displaying the appropriate labels.

Fuel Registration
The Clean Air Act requires all fuel manufacturers and fuel additive manufacturers to register their products with the EPA before making them commercially available, and E15 is no exception. On April 2, the EPA approved registrations submitted by 20 ethanol companies. Poet Biorefining – Caro, a 53 MMgy facility in Michigan, was the first of the ethanol giant’s 27 facilities to register. The registration process was “pretty straight forward” and the company fully supports E15 implementation. “It’s one of Poet’s top priorities to be ready to provide the fuel when the market is ready,” a Poet representative says. All of Poet’s plants have signed up to support the retail fuel survey and will submit the MMP as required by the EPA in order to help ensure safe distribution of the new fuel, he adds. Other companies to register their fuel for use in E15 during April were Archer Daniels Midland Co., Abengoa Bioenergy Holding U.S. Inc., White Energy Inc., Cargill Inc., Tate & Lyle Ingredients Americas LLC, Biofuel Energy Corp., Absolute Energy LLC, Amaizing Energy LLC, Golden Grain Energy LLC, Little Sioux Corn Processors LLLP, Adkins Energy LLC, New Energy Corp., Nesika Energy LLC, Western Plains Energy LLC, Commonwealth Agri-Energy LLC, Chippewa Valley Ethanol Co., Standard Ethanol LLC, Glacial Lakes Corn Processors and Ace Ethanol LLC.

State Specs
While the EPA’s requirements may have been met, producers and retailers must also comply with state specifications. Kansas is expected to be one of the first states to make E15 available, thanks largely to the work of the RFA and the state’s department of agriculture, according to Sue Schulte, director of communications at the Kansas Corn Growers Association. The RFA has worked closely with the KCGA and the state’s weights and measures division on implementation efforts in Kansas, she says, and she gives much credit to the agriculture department for taking a common sense approach to ethanol in general. “Over the years, our Department of Agriculture has been a leader in things like that,” she says, pointing out that Kansas was also the first state to launch a pilot program for blender pumps. There are no statutes that need to be changed in Kansas before E15 can be sold and Schulte anticipates the first retailers could be ready to offer it to their customers in May.

The Iowa Department of Agriculture and Land Stewardship sent a memo to the Iowa Renewable Fuels Association and the Petroleum Marketers and Convenience Stores of Iowa in March, outlining the steps that the department’s Weights and Measures Bureau require retailers to take before selling E15. The list was basic and included fuel registration with the EPA and proper identification of the fuels through required labels. It is expected that Iowa retailers will also soon begin offering E15 for 2001 and newer vehicles.

RVP
A major complexity that remains is the issue of RVP. The EPA allows fuel blends containing 9 to 10 percent ethanol to exceed the 9.0 psi RVP requirement by 1 pound from June 1 to Sept. 15 but did not grant the same exception for E15, which means refiners blending for E15 will need to use a different blendstock for half the year. This requirement makes it difficult and expensive for blenders to offer E15 in those areas of the country requiring reformulated gasoline in the summer months and may essentially shut E15 out of those markets during those times. The ethanol and petroleum industries fought the EPA’s decision regarding RVP requirements for E15, pointing to evidence that suggests the vapor pressure in ethanol blends tops out at 10 percent ethanol, and the RFA is continuing the effort to convince the agency that it should grant an RVP waiver for E15 as well as E10. For now, however, the issue remains unsolved.

Retailer Liability
The decision to offer E15 to approved consumers ultimately falls on the retailer and many have expressed serious concern with potential liability. Several groups have suggested that it will be nearly impossible to prevent consumer misfueling and said the threat of lawsuits outweighs any potential benefits. Additionally, current federal regulations make it difficult for retailers to certify some existing infrastructure for use with higher ethanol blends, which means that they would have to pay a hefty price to install new equipment. A bill introduced in both houses of Congress in late March addresses both of those issues.

The Domestic Fuels Protection Act of 2012 streamlines the EPA’s approval process to allow existing underground storage tanks and fuel dispensers to be used for a range of fuels, including E15. It also exempts retailers from any damages that could occur as a result of misfueling by consumers, as long as the retailer complied with the EPA’s misfueling regulations. Bill sponsor Sen. John Hoeven, R-N.D., stressed the importance of the bill for consumers during remarks delivered April 18 at the RFA’s Washington Legislative Forum. “We need to make all fuels available to American consumers and businesses, and we need to do so by using market-based measures that increase competition and remove bureaucratic obstacles to producing and marketing renewable fuels,” he said. “This is really about giving customers more choice and better prices at the pump by empowering retailers to market multiple fuels using the same equipment. That’s good for the customer, good for business and good for the nation.”

Author: Kris Bevill
Associate Editor, Ethanol Producer Magazine
(701) 540-6846
kbevill@bbiinternational.com

 

Kansas retailer ready for E15
Scott Zaremba was one of the first retailers in the nation to install a blender pump and expects to be one of the first to offer E15 to customers driving 2001 and newer vehicles. The owner of Zarco 66 Inc. operates eight stations in four counties outside the Kansas City metro area, all of which currently have blender pumps. In late April, Zaremba said he planned to switch the side E15 is offered on his blender pumps as soon as all of the federally required components were in place, possibly as early as May 1.

Issues raised by opponents of E15 are not a big concern for Zaremba, who says he is confident the mitigation plan for E15 will provide him with necessary liability protection. “The Misfueling Mitigation Plan that’s in place should solve any of those problems that might happen for a retailer, so we feel very comfortable with being able to dispense to the motoring public a local, American-made fuel,” he says.

Claims that E15 will completely displace E10 are also unfounded. “I think it’s going to be an evolution over time as we move to E15,” he says. “We still have to have products available for year 2000 and older vehicles. We’re at the starting point for where we need to be able to incorporate more American-made fuels instead of importing crude oil. This is our next progressive step.”

As for consumer demand for E15, Zaremba says he’ll find out when he makes it available. “As soon as we educate the consumer on what it is, we believe there will be a good demand for it,” he says. “In renewable fuels, it’s all about educating the consumer.”