Maine DEP working on plan to ban gas blends with more than 10 percent ethanol

Source: By Matthew Stone, BDN Staff • Posted: Monday, January 21, 2013

Mary McLaughlin pumps gas at the Shell station on the corner of Union Street and Griffin street on Tuesday, Jan. 8, 2013. &quotI know that more ethanol is not supposed to be good for your car. So I would be concerned it would ruin my car more," said McLaughlin.

Carter F. McCall.  Mary McLaughlin pumps gas at the Shell station on the corner of Union Street and Griffin street on Tuesday, Jan. 8, 2013. “I know that more ethanol is not supposed to be good for your car. So I would be concerned it would ruin my car more,” said McLaughlin.

AUGUSTA, Maine — The Maine Department of Environmental Protection is preparing to wade into a national debate surrounding gasoline blends made up of more than 10 percent ethanol.

The state agency is at work on a bill that would ban such gasoline blends in Maine if at least two other New England states go along with the prohibition. The legislation is not yet written, and the department is still working on final details.

The move comes amid concerns about E15 — a gasoline blend with 15 percent ethanol — voiced in recent months by the American Automobile Association, boaters, small engine operators, fuel dealers and others that most cars on U.S. roads and most small engines aren’t equipped to handle the more ethanol-heavy blend.

The U.S. Environmental Protection Agency started allowing the sale of the 15 percent ethanol blend in June 2012. And while it’s only available at 10 gas stations in Iowa, Kansas and Nebraska, the ethanol industry is aggressively marketing the E15 blend and pushing for its more widespread adoption in the marketplace.

Officials at the Maine DEP say they expect a push from the federal government to require the use of more ethanol-heavy gasoline. Most gasoline available today is a blend with 10 percent ethanol, a corn-based alcohol added to gasoline.

The 10 percent blend became common after the 2007 federal Renewable Fuel Standard started requiring fuel producers to blend an annually increasing amount of renewable fuels — mostly ethanol — into gasoline. In 2008, the federal law required 9 billion gallons of renewable fuel be blended into gasoline. That number will rise to 36 billion gallons by 2022, according to the EPA.

“We see the writing on the wall from the feds, and we want to make sure that Maine consumers and businesses are protected if others in the region are doing the same,” said DEP spokeswoman Samantha DePoy-Warren.

According to AAA, about 95 percent of car owners could face the possibility of voided warranties on their vehicles if they fuel up with E15. A recent survey by the association found that five auto manufacturers explicitly stated their warranties wouldn’t cover E15-related damage claims. Eight other automakers said E15 doesn’t comply with their vehicles’ fuel requirements, and that use of the fuel blend could result in a voided warranty.

AAA in November called on the EPA and fuel producers to stop selling the E15 blend until consumers have more information about it in order to prevent confusion and damage to their vehicles.

Meanwhile, the Washington, D.C.-based Renewable Fuels Association, which represents the ethanol industry, says 62 percent of light-duty vehicles on U.S. roads today, representing 80 percent of fuel purchases, can use E15.

With E15 unlikely to make it to Maine anytime soon, the DEP’s proposal appears to be “a solution in search of a problem,” said Bob Dinneen, president and CEO of the Renewable Fuels Association.

“If there are consumers in Maine that would like to add E15 to their 2012 Ford, and it’s going to reduce their gasoline price, because it would, then I think Maine should want to see consumer choice,” he said. “They’re taking that consumer choice away, and that seems somewhat un-American to me.”

But the proposal for a ban on gasoline with more than 10 percent ethanol makes sense to gasoline sellers in Maine, said Jamie Py, president of the Maine Energy Marketers Association, especially given warnings from automakers about voided warranties if owners fuel up with E15.

“We don’t want to sell something that people can’t use and that people wouldn’t want to use,” he said.

If Maine lawmakers pass a ban on E15, it would only take effect if two other New England states pass similar policies. No other New England state has such a policy in place. The New Hampshire House last year passed an outright ban on ethanol as a gasoline additive, but that measure was ultimately unsuccessful.

“Our proposal reflects that we’re part of a regional distribution system,” DePoy-Warren said.

If Maine were to go it alone in banning gasoline with more than 10 percent ethanol, that likely would lead to higher gasoline prices in Maine as refiners develop a gasoline blend unique to Maine, said Py.

“What you don’t want is a boutique gasoline just for Maine,” he said. “That makes a lot of sense, that you have a regional approach to it for supply, cost, interchangeability issues.”

While an E15 ban in Maine might make sense for gas station owners and drivers, Py said, a state ban would still put Maine at odds with the federal government’s renewable fuels requirement. And if Maine’s ban directly conflicts with federal law, he said, Maine’s fuel suppliers would have to buy credits so they can continue selling the 10 percent ethanol blend. The cost of those credits could raise fuel prices, Py said.

“We’re getting to the point where either the federal government is going to have to back off the amount of renewable fuels that they require or retailers are going to have to start selling something like an E15, which leads to other problems,” he said.