Compliance News / Compliance

EPA Hearing Discusses Biofuels Blend

Industry Nears the Blend Wall

December 6, 2013
KEYWORDS EPA / renewable fuel
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The EPA held hearings Thursday about a plan to scale back the percentage of ethanol and other biofuels that by law are blended into the motor vehicle fuels.

The 2007 Renewable Fuels Standard mandates the blending of 18.15 billion gallons of renewable fuel into U.S. automotive fuels in 2014, but the EPA’s proposal calls for blending only 15.21 billion gallons, saying fuel producers have hit a blend wall. They define that wall as the point at which the law requires the use of more ethanol than can be blended into gasoline at the current national average of 10 percent.

Approximately 300 groups on both sides of the issue registered to testify, including the Governor of Iowa, Terry Branstad. "There's no reason why they should flinch under the pressure of big oil at this critical time,” he said, citing the benefits to rural America.

However, Bob Greco, American Petroleum Institute downstream group director, countered, “There are serious vehicle and retail infrastructure compatibility issues associated with the usage of gasoline containing ethanol in excess of 10 percent by volume. Left untouched, the statutory mandates could cause fuel rationing, drive up the cost of diesel by 300 percent and the cost of gasoline by 30 percent by 2015, and lead to a $770 billion decrease in U.S. GDP and a $580 billion decrease in take-home pay for American workers, according to a study by NERA economic consulting,”

Also testifying, Environmental Working Group (EWG) Policy Associate Alex Rindler told the EPA,The RFS “isn’t working as designed” and must be reformed. “The proposed 2014 standards lower the overall mandate enough to stave off the blend wall, but this reduction will do little to weaken corn ethanol’s chokehold on the market, and it won’t help the cellulosic ethanol industry gain a foothold in the E-10 pool.

Colleague Scott Faber, EWG’s VP of government affairs, was quoted in the Oil & Gas Journal calling for an end to the mandate and a rethinking of the RFS. “Even EPA in its own regulatory analysis has concluded that corn ethanol is producing more greenhouse gas emissions than the gasoline it was designed to displace, and that our heavy reliance on corn ethanol is a significant source of water and air pollution.”

As Rindler told the EPA, “The more we learn of corn ethanol’s harm to the environment, the more difficult it is to justify a renewable fuels policy that mandates its use.” The effects aren’t only environmental, as  many groups attest. The addition of biofuels to gasoline is a particular issue for open cycle engines, which can’t compensate for the hotter-burning ethanol and so overheat. That causes some engines to run faster. In the case of some chainsaws, this engages the clutch causing the cutting chain to spin, posing a safety hazard. Ethanol also is corrosive, damaging certain types of metals, dissolving some fiberglass resins and damaging elastomeric materials used in seals and gaskets. Reports also indicate that the presence of biofuels triggers microbial growth in the fuel.

 The biofuels industry is battling this proposal. Biodiesel producer Renewable Energy Group leaders testified at Thursday’s hearing, citing jobs, production and environmental benefits as reasons to increase the biomass-based diesel renewable volume obligations to at least 1.7 billion gallons. Gary Haer, REG VP of sales and marketing, says 2013 volumes reduced greenhouse gas emissions by 32 billion pounds compared to petroleum diesel fuel. 

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