Ethanol boosters scramble to decode Trump’s E15 plans

Source: Marc Heller, E&E News reporter • Posted: Monday, April 23, 2018

A week after President Trump promised to make higher-ethanol fuel available year-round, industry insiders say they are in the dark about how or when the administration will do so.

Ethanol advocates said they have written to corn-state lawmakers, the Department of Agriculture and EPA seeking information about the administration’s next steps — but have yet to receive a clear answer.

And while the most likely route would be for EPA to draft regulations freeing 15 percent ethanol fuel from summertime restrictions, an EPA spokeswoman yesterday had little detail to offer.

“There is not consensus on the regulatory path forward on the E15 RVP waiver and related issues,” said EPA spokeswoman Liz Bowman, referring to the Reid vapor pressure rules that restrict certain fuels because of ozone concerns.

Another, less likely, route would be an executive order from Trump, industry sources said.

The lack of clarity frustrates some ethanol advocates, although they said they still believe Trump meant what he said. The president told reporters April 12 that the administration would make the change, “which makes a lot of farmers very happy.”

The president has also left an impression with Sens. Joni Ernst and Chuck Grassley, Republicans from Iowa, that the change could come without attaching policies that would weaken other parts of the renewable fuel standard, said Monte Shaw, executive director of the Iowa Renewable Fuels Association, who is in regular contact with Iowa lawmakers’ offices.

“We’re optimistic that maybe we’ve crossed that point of no return,” said Shaw.

EPA Administrator Scott Pruitt has said he supports lifting the restriction on E15 if he has the authority to do that. And he’s included the idea as part of a mix of renewable fuel measures being discussed with the White House, which Shaw said should indicate Pruitt thinks he has that authority.

But a package deal would probably include other steps that ethanol advocates oppose, such as easing the mandate on refiners who buy renewable fuel credits, called renewable identification numbers, or RINs, to show compliance with the renewable fuel standard.

The oil and gas industry is pushing for a more comprehensive solution that would reduce the expense of buying credits, although prices have fallen sharply amid signs the government might impose price controls.

Waiving the seasonal restrictions through regulations wouldn’t be unprecedented. In 1989, EPA lifted restrictions on E10 fuel to allow full-year sales. A year later, Congress put the change into law.

In waiving the limits on E10 at the time, EPA said the benefits of cleaner exhaust outweighed any increased emissions from evaporation of the higher-ethanol fuel.

E15 wasn’t available at that time. When EPA allowed limited sales in 2011, it didn’t extend the year-round provision to the new fuel; that greatly limited marketplace opportunities, according to the Renewable Fuels Association.

While supporters of the higher-ethanol fuel press their case, groups at the other end of the debate are touting fuel that doesn’t contain any ethanol at all.

A group called Smarter Fuel Future, composed largely of farm livestock groups worried about the use of feed corn for ethanol, reported that Iowans bought more ethanol-free fuel than E15 and all flex fuels combined in 2016. The report was based on information from the Iowa Department of Revenue.

“This dichotomy in Iowa is proof of the flaws inherent in the RFS mandate,” the group said in a news release Wednesday. “While the biofuel lobby and its backers in the state continue to push for higher national blending mandates, E15 sales waivers, and additional taxpayer funding for ethanol infrastructure, Iowa isn’t carrying its own weight.”

Biofuel usage is limited by the number of stations that carry E15, as well as the farm industry’s reliance on equipment that isn’t made to run on ethanol, alternative fuel advocates said.

A more recent state report from 2017 suggests biofuel use continues to grow in Iowa. That report shows the biggest increase in biofuel usage since data were first collected in 2007, the Department of Revenue reported.

“We are spiking up, and they are going down,” Shaw said.