The news was just announced:
WASHINGTON – The U.S. Environmental Protection Agency (EPA) today waived a limitation on selling fuel that is more than 10 percent ethanol for model year 2007 and newer cars and light trucks. The waiver applies to fuel that contains up to 15 percent ethanol – known as E15 – and only to model year 2007 and newer cars and light trucks. This represents the first of a number of actions that are needed from federal, state and industry towards commercialization of E15 gasoline blends. EPA Administrator Lisa P. Jackson made the decision after a review of the Department of Energy’s (DOE’s) extensive testing and other available data on E15’s impact on engine durability and emissions.
“Thorough testing has now shown that E15 does not harm emissions control equipment in newer cars and light trucks,” said EPA Administrator Lisa P. Jackson. “Wherever sound science and the law support steps to allow more home-grown fuels in America’s vehicles, this administration takes those steps.”
A decision on the use of E15 in model year 2001 to 2006 vehicles will be made after EPA receives the results of additional DOE testing, which is expected to be completed in November. However, no waiver is being granted this year for E15 use in model year 2000 and older cars and light trucks – or in any motorcycles, heavy-duty vehicles, or non-road engines – because currently there is not testing data to support such a waiver. Since 1979, up to 10 percent ethanol or E10 has been used for all conventional cars and light trucks, and non-road vehicles.
Additionally, several steps are being taken to help consumers easily identify the correct fuel for their vehicles and equipment. First, EPA is proposing E15 pump labeling requirements, including a requirement that the fuel industry specify the ethanol content of gasoline sold to retailers. There would also be a quarterly survey of retail stations to help ensure their gas pumps are properly labeled.
The Energy Independence and Security Act of 2007 mandated an increase in the overall volume of renewable fuels into the marketplace reaching a 36 billion gallon total in 2022. Ethanol is considered a renewable fuel because it is produced from plant products or wastes and not from fossil fuels. Ethanol is blended with gasoline for use in most areas across the country.
The E15 petition was submitted to EPA by Growth Energy and 54 ethanol manufacturers in March 2009. In April 2009, EPA sought public comment on the petition and received about 78,000 comments.
The petition was submitted under a Clean Air Act provision that allows EPA to waive the act’s prohibition against the sale of a significantly altered fuel if the petitioner shows that the new fuel will not cause or contribute to the failure of the engine parts that ensure compliance with the act’s emissions limits.
The key point here is that they have “allowed it” in limited situations. I think the problem now is going to be actually getting retailers to sell it, and buyers to buy it. With the recent spike in corn prices, ethanol is again more expensive than gasoline on an energy equivalent basis. Sales of E85 were already falling, so it is hard to imagine that demand for E15 is going to be high. Further, retailers could be liable if people damage older vehicles by fueling with E15, so they will take a cautious approach. It is somewhat of a logistical nightmare for retailers to offer E15 for only specific vehicles.
I think this will be like the situation before the ethanol mandates — that market simply won’t grow very quickly unless/until it is mandated. So, the bottom line is that I don’t expect much to change with this ruling. But I do expect that the next round of lobbying will be to turn this into an E15 mandate.