Governors' Biofuels Coalition

Nearly all of the gasoline sold in the U.S. is blended with 10% ethanol, a mixture called E10. The industry hopes to push beyond that level of domestic use with a combination of promotion at the pump and lobbying EPA to ease the sale of higher blends, biofuels advocates heard at the Iowa Renewable Fuels Summit this week.

The good news for the industry is that consumers seem to like the combination of higher octane and lower price they get when buying E15, a 15% ethanol blend approved by EPA for most of the cars on the road (2001 model years and newer).

“When we give consumers the option, they are choosing E15 again and again,” Emily Skor, CEO of the ethanol promotion group, Growth Energy, said in a speech at the Summit Tuesday.

In an interview with Agriculture.com, Skor said E15 is now sold at more than 1,300 gas stations in 29 states, including many in the East that are outside of rural areas in the Corn Belt.

“That number has doubled four years in a row,” she said. Growth works with a nonprofit industry fund, Prime the Pump, that offers financial incentives to gasoline retailers to help cover costs of adding the higher blend fuel. The fund can’t afford to work with all sellers, but the popularity of E15 is already pushing competitors to sell the fuel as well.

“You need to see a market flip and we’re starting to see that in the Twin Cities,” she told Agriculture.com

Skor drew applause when she told the meeting that the Holiday gas chain in Minnesota added E15 at 26 stations when it started losing sales to competitors already offering the higher blend fuel.

Still, the industry has a long way to go. It has gotten the fuel into only about 1% of some 150,000 stations nationwide. A major barrier is that in most markets, EPA bans the sale of E15 during the summer, except to flex-fuel vehicles.

The ban is based on the fact that when ethanol is blended with gasoline, it makes the combined fuel more volatile, as measured by Reid Vapor Pressure (RVP). Ethanol itself isn’t a volatile fuel, but the combination is, especially lower levels of ethanol like E10, which was given a waiver from the RVP restriction by Congress.

As the concentration of ethanol in a fuel is raised, the RVP goes down, but so far, neither Congress nor the EPA has allowed a waiver for the higher blend.

Changing that rule would almost flood the domestic market with more ethanol, some analysts believe.

“If we can get the E15 waiver, I see consumption rising to 19 billion gallons,” Mike Blackford, an analyst with INTL FC Stone told listeners at the Summit Tuesday. That would be well above the current level of about 14 billion gallons sold in the U.S., as well as the 15 billion gallon mandate for corn ethanol blending under the federal Renewable Fuel Standard.

Lobbyists speaking at the Summit took heart from testimony going at the same time at a Senate hearing in Washington, D.C.

Speaking to the Environment and Public Works Committee Tuesday, EPA Administrator Scott Pruitt pledged that his agency would soon determine if it has the administrative authority to raise the waiver for E15.

In Sioux Falls, South Dakota, another ethanol promotion group, the American Coalition for Ethanol (ACE) saw Pruitt’s testimony as a sign of possible support for E15.

“ACE members are grateful Administrator Pruitt is committed to completing the review of EPA’s legal authority to provide RVP relief for E15 and higher blends and that he reiterated the agency’s interest in how high-octane fuels can meet fuel efficiency standards,” the group’s CEO, Brian Jennings, said in a statement.

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