Ethanol Blend Decision Delayed..Again

Higher ethanol blend decision not expected now until fall and requirements on model years could make decision confusing.

News that the Environmental Protection Agency will delay its decision on approving higher ethanol blends "reinforces a public perception that government bureaucracy does not work in the interests of the public," wrote Growth Energy CEO Tom Buis in a letter to President Barack Obama.

Reports out Thursday indicated that the Department of Energy will need to do more testing before allowing more than 10% of ethanol into the gasoline supply.

Growth Energy first requested for the waiver in March 2009 and a decision was to be made in December 2009. At that time the Environmental Protection Agency said it would make a final determination on the waiver this summer.

A source was quoted in Reuters stating that "DOE is saying the testing isn't done and it may be into the fall before it is done."

Buis didn't hold back in his letter to the President when he added that a "well-worn tactic for delaying action in Washington, D.C. is to continually study or demand further testing." He said the data submitted with his group's waiver request shows that the science already proves the benefits of ethanol as a transportation fuel.  

Buis wrote that the further delay is unacceptable. "The fact that the federal agencies involved here cannot meet their own deadlines – on a decision that means so much to our nation – reinforces a public perception that government bureaucracy does not work in the best interests of the public," he said. "We urge you to direct the federal agencies involved in this waiver to expedite the testing process, add extra staff, additional shifts, or whatever other steps necessary to accelerate the completion of the testing."

In addition, the Renewable Fuels Association reported EPA is preparing to approve E15 use for only model year 2007 and newer vehicles in September while waiting to approve E15 for model year 2001 and newer vehicles later this fall. The RFA said it has challenged EPA to provide any justification for the decision, but the agency has yet to do so.

“EPA is dropping the ball, and for no scientifically justified reason,” said RFA president and CEO Bob Dinneen. “While initial plans to approve the use of E15 for only 2001 and newer vehicles were bad, this plan borders on shameful. Confusing the market as EPA seems intent upon doing likely will lead to little if any additional ethanol being sold.”

RFA also expressed frustration with EPA failing to approve the use of 12% ethanol blends. Recently the call for intermediate blends has increased. Within recent weeks Patricia Woertz, chief executive officer of major ethanol producer and agribusiness company Archers Daniels Midland called for the EPA to approve the 12% level.

Existing oxygenate stacking rules would allow for a move to 12% while the EPA decides on E15. Specifically, current “stacking” rules allow for the addition of up to 2% MTBE on top of currently allowed 10% ethanol blends. As ethanol and MTBE are both oxygenates, this additional 2% volume could be ethanol. In practice, a vehicle engine would not recognize if the oxygen content was from one fuel or two.

Allowing up to E15 blends, up from current 10% limits, would mean a potential increase of 6.5 billion gallons of new ethanol demand.

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