Chicago to Vote on E15 Mandate

Source: By Myke Feinman, DTN    • Posted: Thursday, January 8, 2015

STREATOR, Ill. (DTN) — The Chicago City Council plans to vote this month on an ordinance mandating 25% of the city’s fuel stations sell E15.

E15 is gasoline containing a blend of 15% ethanol. Most gasoline sold in the United States contains up to 10% ethanol.

The ordinance advanced to the full city council for a vote Dec. 10, 2014, after the City Council Finance Committee, headed by Alderman Ed Burke, passed the “Clean with E15” ordinance earlier that week. But before a vote was taken, aldermen asked that the vote be deferred for one month.

Chicago Mayor Rahm Emanuel’s office told Schneider Electric last week the ordinance needs more work.

“We continue to study the impact on consumers, small businesses and the environment,” a spokesman for Emanuel’s office said. “As the first city in the nation to consider this change, we must ensure that its impacts are positive.”

The ordinance would exempt small-volume retailers, marinas and any stations that would need to install new tanks.

The mandate, which would go into effect 180 days after its passage, requires that fueling stations in the city make E15 available to the public unless “the average annual volume of fuel sales is less than 500,000 gallons” or the station’s underground storage tanks are “not compatible with the storage of blended fuel.” This rule is estimated to require roughly 25% of the stations in the city to sell E15.

The mandate comes with infrastructure costs, according to Jim Watson, executive director of the Illinois Petroleum Council.

“Complying with the mandate could cost Chicago gas station owners upwards of $100,000” to install new equipment, Watson said. “That’s a huge burden for a sector in which 94% of service stations are independently owned and operated. This is bad government at the expense of Chicago drivers and small businesses.”

However, Prime the Pump, a non-profit organization formed in February 2014 to pool industry resources to expand E15 and higher blends, has committed $10 million to pay for retailers’ retrofit costs in the city.

In addition to infrastructure costs, there are fears higher blends like E15 could result in engine failures. In addition, auto manufactures do not warranty the legacy fleet for use of E15.

“Consumers who use E15 could end up with broken-down cars and high repair bills,” Watson said. “And since E15 doesn’t qualify for the 20% state sales tax exemption and contains less energy than regular gasoline, filling up with E15 could be more expensive while lowering gas mileage.”

Ray Defenbaugh, Prime the Pump chairman, told Schneider Electric last week that although there is opposition, he believes the ordinance would pass.

“I’ve got faith in the common sense of the average individual that is concerned about health aspects and have faith in making right decision,” Defenbaugh said. “I also recognize a tremendous amount of pressure from antagonists.”

The Urban Air Initiative and Energy Future Coalition, non-profit organizations concerned with fuel impacts on air quality, say higher blends of ethanol in gasoline result in a reduction of toxic air emissions.

“Corn growers, the farm bureau and all four ethanol trade organizations have a strong belief ethanol has a [positive] health factor involved,” Defenbaugh added.

If passed, the proposed ordinance would mark another in a string of environmental-related laws generated by the Chicago City Council.

“Chicago has time and again led the country in taking action to clean the air,” said Chicago Alderman Anthony Beale, also a supporter of the E15 ordinance. “The city banned leaded gasoline in 1984, and we banned a variety of toxic gasoline additives in 2000,” said Beale. “This ordinance continues that tradition of environmental leadership and stewardship.”