An Identity Crisis—Ethanol Blending is a Refinery?

Source: By Dave VanderGriend, Urban Air Initiative • Posted: Tuesday, October 8, 2019

By Dave VanderGriend, President Urban Air Initiative

There have been many Hollywood movies where a character woke up to find they had become something else—a grown up becoming a kid, or a woman becoming a man, and so forth. Seems crazy but perhaps not so much because anyone who owns a blender pump woke up one day in June to find out they were a refiner! Actually, a “fuel manufacturer” to be exact, with all the numbing, strangling regulations that go with it.

While the fire is raging throughout the entire biofuels industry over the small refinery waivers and the renewable volume obligations, a huge storm cloud has been forming that has received little notice but could have a crippling impact on the ethanol industry’s ability to move to higher blends.

A little noticed provision in the recent rule allowing year-round sales of E15 not only definitively capped ethanol blends at 15% but has made it illegal to dispense any blend other than E15 or E85 which would effectively shutdown the “middle slots” of a blender pump.  Anyone who would dare to dispense E20, 30, or 40 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 which is designed and marketed as being able to run on any combination of gasoline or ethanol up to 85%.

Because EPA has failed to extend the substantially similar definition of fuel additives to blends beyond E15, we are in a room without doors— there is simply nowhere to go. A little background may be in order to understand this more clearly.  E10 was previously ruled to be substantially similar to E0, the recent rule stated E15 was substantially similar to E10.  At the Urban Air Initiative and with our various partners and supporters, we argued in our comments that all blends above that should be considered substantially similar, and at a minimum E20 was similar to E15 since that is what DOE and EPA tested.

The Clean Air Act allows for varying amounts of fuel components so long as those components were present in the certification fuel used to test vehicle emissions.  For example, toxic aromatics can vary from 10% to 50% in consumer fuels because they are present in the certification fuel.  Ethanol is also 10% of the certification fuel, however EPA is capping ethanol at 15% as a maximum.  So once again, EPA has singled out ethanol to the point where we cannot use it or dispense it.  The reality is that the burden of proof is on EPA to show that increased ethanol volumes would increase emissions, and we feel strongly they cannot meet that test.

Through our work at the Urban Air Initiative we know that adding ethanol to consumer fuel, i.e. real world fuel and not concocted test fuels, results in toxic emissions going down, period. EPA has refused to test splash blended ethanol fuels, which is how it is done and why we harp so much on the need to test “real world” fuels.

And another level of this absurdity is that EPA’s underlying studies that have concluded ethanol increases emissions are not only based on laboratory tests of what can only be considered “fake” fuels, but they have a fraction of the data we have amassed in terms of gallons, cars, and miles driven.  After 7 million miles of E30 use in thousands of cars, there have been no consumer complaints and no evidence of material or emission system degradation. Contrast that with EPA’s testing in the EPAct study that is the data base for emissions modeling when they used 26 cars driving less than 10,000 miles.

Under the new rule and EPA’s interpretation, any blend above E15 will have to apply for a waiver just as E15 did to be able to go above E10.  Until then these mid-level blends are not approved and producing them through blender pumps would constitute the “manufacture” of a fuel, which is what a petroleum refiner is.   Anyone with blender pumps would be subject to the same rules as a refiner, registering and testing the fuel.  But it gets worse: Refiners are required to test every batch of fuel they sell to terminals. If the new rule is taken literally, EPA  would consider every fillup of  E20/30 etc. a batch.  Obviously, the rules were designed to test large batches in the millions of gallons of fuel to ensure compliance with various regulations, not to crush innovative mid-level blends.

Confused?  Bewildered? Ready to give up?  If so then EPA succeeded. The addition of this provision to the E15 rule does not appear to be an accident. It seems to be a carefully timed and designed provision that will make it impossible to dispense any fuel other than the E15 or E85.

We have many blender pumps in my state of Kansas and there are hundreds throughout the Midwest and other states. These pumps were often the result of federal grants through USDA’s Renewable Energy for America Program, matched by state funds as well as industry. For the same federal government to render these inefficient at best and potentially useless to the point of being abandoned is difficult to comprehend.

Many readers of this would be aware of the E30 challenge in Watertown South Dakota which has demonstrated E30 blends in conventional vehicles are economical and as previously noted have resulted in not a single complaint or mechanical issue.  For EPA to effectively ban the sale of these fuels even into FFVS suggests a bigger motive is at play, which is to limit the market penetration of ethanol, plain and simple.

Interestingly, this comes a t a time when the state of Nebraska is, with EPA’s approval, testing E30 in state vehicles.  South Dakota, North Dakota and other states have indicated interest in duplicating that program.  And EPA cannot claim ignorance of E30— they specifically asked for comments on the use of E30 in the Tier 3 Rule in 2016.  Just last week, a bi-partisan message from Iowa Republican Senator Chuck Grassley and former Democratic Colorado Senator Tim Wirth penned an article calling on the environmental community to look at the benefits of higher blends like E30.

I hope my colleagues throughout the ethanol industry recognize just how crucial it is to have EPA correct this punitive interpretation of refinery rules.  Our highest value is providing high octane in a low carbon fuel. That means we must go beyond E15 to provide any meaningful octane boost and to replace toxic aromatics.

Urban Air Initiative, the National Farmers Union, the Clean Fuels Development Coalition and many of our collective members and supporters have joined in a petition to EPA for an Administrative Review of this specific provision of the rule, with the next step being to challenge it in court.  Let’s hope rational thinking prevails and the agency agrees that this is an excessive and overly restrictive interpretation, and at least frees up those “middle slots”  of a blender pump so consumers have a choice in the levels of ethanol they put in their cars.

Dave VanderGriend is President of the Urban Air Initiative