Ethanol in the Fast Lane

Oil companies and distributors in the Southeast are taking advantage of sustained lower ethanol prices, which has led to a rather interesting series of events.
By Ron Kotrba | January 10, 2008
Tremendous ethanol-blending activity is underway south of the Mason-Dixon Line and east of the Mississippi River. Sustained lower ethanol prices have attracted the attention of oil companies and fuel distributors, which in turn has brought apprehension about changes in the volatility of fuels purchased by consumers. Certain fuel specifications, which were of little concern when ethanol was out of the picture, are being re-examined by state watchdogs at the behest of those who could suffer under the regulatory status quo. In order to facilitate increased blending of ethanol without regulatory hang-ups, state regulators across the Southeast and ASTM itself are considering revamping its rules regarding ethanol-blended gasoline.

Some of the first movements in adjusting fuel specifications in the Southeast occurred in Tennessee, where a state regulating division within the agriculture department promulgated emergency rules amending its kerosene and motor fuels quality inspection regulations, covering standards for ethanol-blended gasoline. While issued in September, the state had been in a fact-finding mode well before then. If the phrase "emergency rules" were not alarming enough, the second paragraph of the document reads, "It has been determined that the current rules for finished gasoline blended with ethanol will impede the lawful blending of such fuels, and that the current rules can be amended to account for the testing variances that occur when ethanol is blended into finished gasoline, while still ensuring vehicle operability and thus protecting the consumer." The document details changes to its motor fuels code covering adjustments to the minimum temperature at which 50 percent of a tested fuel is vaporized (T50); the temperature at which the vapor-to-liquid ratio (TVL) is 20 percent; and Reid Vapor Pressure, or the vapor pressure of fuel in a closed vessel, is at 100 degrees Fahrenheit. As E100 and unblended gasoline are mixed, the changes in volatility are not linear as ethanol blend levels increase (see Figure 1).
Figure 1

SOURCE: SOCIETY OF AUTOMOTIVE ENGINEERS (PAPER 852116)


How temperature and the evaporation properties of a given fuel could affect vehicle performance.
SOURCE: ENVIRONMENT CANADA



With Reid Vapor Pressure measured in pounds per square inch on the left over varying percentages of fuel additives represented by the different curves, the effect of base gasoline RVP on RVP increase due to the addition of ethanol can be seen in the third curve from the top.
SOURCE: ENVIRONMENT CANADA


Randy Jennings, a regulator with Tennessee's department of agriculture, says E10 blends in the winter would have a tough time passing the vapor-to-liquid ratios prior to the promulgation of those emergency rules. "But volatility in the summertime is not such a big deal," he says. Vapor lock, or too much heat and pressure (measured in pounds per square inch) in the fuel lines, can hinder the proper flow of fuel and adversely affect vehicle performance. Realistically, vapor lock is more of an issue with old carbureted engines rather than with fuel-injected vehicles. Nevertheless, David Au, a chemist for the state of Georgia, quips that old and new cars deserve equal protection under the motor fuels law. Blenders adjust RVP for the season, lowering it in the summer and increasing it during the winter.

Georgia is making moves similar to those made in Tennessee. So is North Carolina, Alabama, Florida and more southeastern states. Prior to the exacting spread of ethanol from the Corn Belt outward, fuel inspectors in many southeastern states had never tested retailers' fuel samples for some of these items because there was no need to. "No one's been running these tests," Jennings tells EPM. "The vapor-to-liquid ratio has not been an issue with unblended gasoline. There's not going to be a lot of testing when 99.9 percent of the fuel samples pass." Add the growing reality of much more E10, and the heightened sense of attention the renewable fuel has received and the story changes.

Florida and Alabama
Florida consumes 8.6 billion gallons of gasoline a year, according to state numbers, and ranks third in the nation behind California and New York. The Ethanol Promotion and Information Council and other advocacy groups for renewable fuels compared this high fuel-consumption ranking with the state's minimal use of ethanol. Soon after, these groups and state agencies went full-on with campaigns, especially Ag Commissioner Charles Bronson, who spearheaded the Florida Farm to Fuel summits to increase awareness and boost availability of E10 and E85 at strategic retail outlets. The EPIC even went so far as to fly banner planes up and down long stretches of Florida's beautiful beaches during spring break, the most crowded time of year. In August, the state ag department announced that midstream major Kinder-Morgan was purchasing ethanol from an Alabama-based fuel broker, The Ethanol Corp., which gained corporate status in Alabama in late November 2007. The filing was issued to the fuel distribution company named Hi-Tech Fuels Inc. Kinder-Morgan blends gasoline with ethanol at its new Port of Tampa blending facility and sells it to Murphy Oil Inc. Murphy Oil distributes the E10 to 47 retail stations in central Florida. "These companies have stepped up to the plate and are getting the product out to consumers," Bronson says. "It is proof that by working together, clean, renewable energy is at our fingertips."

Matthew Curran, chief of Florida's Bureau of Petroleum Inspection, tells EPM the number of stations carrying ethanol blends is increasing rapidly. "In order to distribute and sell such products, the proper infrastructure has to be in place," he says. Kinder-Morgan's new Port of Tampa blend facility is a prime example. Also, a New York-based energy company, Hess Corp., has more than 350 retail stations in the Sunshine State and plans to begin selling E10 at all of them soonthat is, once changes to state specs on T50, TVL and RVP take place.

In neighboring Alabama, the state petroleum council, a lobbying group consisting largely of the Chevrons, the ExxonMobiles and the Shells, approached state officials and asked them to review the rules and regulations on ethanol blends, says Jeff Webb, legal advisor to Alabama Ag Commissioner Ron Sparks. "We were kind of confused at the time because we have had ethanol blends sold in the state since 1982, and they continue to be sold today," Webb tells EPM. "The [petroleum council] wanted us to consider an exemption or modification of some rules they claimed they needed to be able to start having more ethanol blends offered in the state. Our response to them when they said they needed a change or else they wouldn't be able to blend or offer blends in the state was, We've got three companiessmaller, independent companiesthat have been selling an ethanol product for a number of years. Why can they do it and you can't?'" It is an interesting question, but the answer is quite simple.

Independent companies don't handle the volume of fuels the majors do, so ethanol blends have been approved in Alabama for 25 years but historically the numbers of stations carrying E10 have been few. This means the gross majority of instate fuels had no problems meeting these specifications. If a blend failed here or there because of ethanol, no big deal. This phenomenon of low volumes of ethanol blending in these states led many of them to stop testing certain parameters, just like Jennings from Tennessee saysif 99.9 percent of the fuels are passing the tests, why bother? Furthermore, studies show that blended fuels that fail some of these specs would not have adversely affected the operation of most vehicles on the road anyway. This opened the door to look at adjusting the specs to more easily accommodate E10 as it would be showing up more frequently in test samples as major oil distributors smell profit from blending low-priced ethanol into fuel supplies despite high transportation costs to deliver the fuel predominantly from the Midwest.

Evidence Suggests Spec can be Flexible
In a Marathon Petroleum Co. LLC corporate presentation on "changes to promote and protect but not impede E10," the company states it is unaware of any drivability issues associated with lower T50 and TVL values from fuels sold in its stores. Marathon claims to be one of the largest retailers of ethanol-blended gas. "Available E10 data suggests T50s below ASTM minimums are not detrimental to drivability," states the corporate document.

In early 2007, Coordinating Research Council Inc. released its "2006 Hot-Fuel-Handling Program Final Report (No. 648)," which Tennessee found quite valuable, Jennings says. "A study was done under brutal conditions in Arizona at General Motors Corp.'s proving grounds," he says. "The altitude was 1,000 feet and ambient temperatures of 120 degrees F. There were some E10 T50 results as low as 153 degrees, and low TVL's to 118 degrees, and showed no statistically different [operational results] in the tested vehicles. They ran the whole gamut of vehicles and they were fine. You can get vapor-to-liquid ratio down in hot weather quite a bit lower than one might expect." While this CRC report states T50 can dip to 153 degrees, Marathon states acceptable vehicle performance with T50s as low as 140 degrees under worst-case conditions. Jennings says many Midwestern states don't have this issue of adjusting the specs because they've waived these tests altogether. At ASTM's December meeting they entertained a ballot to lower the TVL spec, but too many nonadjudicated negatives caused the measure to fail, Jennings says. "As a concession we are all looking at options as to what we can do with TVL," he says. Until then, Tennessee has its emergency rules in place.

North Carolina
With its sandy barrier islands to the east where famous pirates once plundered and the Great Smoky Mountains in the west, North Carolina has been a burgeoning biofuels hot spot for some time, thanks in part to Anne Tazwell with North Carolina State University.

She is the transportation program manager in the North Carolina Solar Center, which houses the university's alternative energy projects. Tazwell says increased ethanol blending in the Tar Heel State is totally driven by economics. She has tracked the ups and downs of ethanol blending there over the past few years. "In the western part of the state there are some hot spots now," she tells EPM. "But in 2006, there was a big drop due to ethanol's higher prices. Meanwhile, during that same time, state agency usage increased dramatically." That's because state agencies were operating under a petroleum displacement plan passed in 2005. One beneficial outcome has been the establishment of at least one E10 pump in all 100 counties in the state for state vehicles. "So while marketers stopped blending [in 2006], state vehicles alone used 7.5 MMgy of E10, or 750,000 gallons (of ethanol)," Tazwell says. In 2004, North Carolina's total gas consumption was about half that of Florida's, or 4.4 billion gallons. In 2005, the volume of E100 sold retail (blended as E10) topped out at 4.4 million gallons, but with 2006's higher prices distributors stopped blending ethanol, and volume sales of E100 dropped significantly to 1.9 million gallons. "We're seeing them come back now," Tazwell says. With more ethanol comes the need for more bulk storage capacity for the renewable fuel. Tazwell says while certain regions like Charlotte are capacity deficient, other bulk storage terminals such as the one in Greensboro, N.C., are increasing ethanol storage capacity.

Art Rupard, program manager for gas and oil in the state motor fuels lab, says a few distributors have been "dabbling in ethanol" for years (United Energy Fuel Distributors and Ray Thomas Petroleum), and one new major distributor, Wilco Energy Corp. recently started blending ethanol. EPM's calls to these North Carolina fuel distributors were unanswered. Rupard says he understands that pending changes to fuel specs have been requested by the oil companies. "Maybe they think they will have a problem meeting the specs because they are asking for this change," he says. "Actually, we haven't even been testing TVL. We are not testing it but they are asking for a complete waiver on it." Right now, North Carolina's T50 spec is 70 degrees Celsius, or 158 F. "We have not condemned any yet," Rupard says. "The proposal is to drop it to 64 degrees Celsius, 147.2 F." Rupard is more concerned about phase separation in underground storage tanks than anything else. "We have had a couple of pretty bad cases of phase separation," he says. "We stop sale when we find it." The state also grants a one-pound waiver on RVP for E10. North Carolina has 11 retail E85 pumps, and one federal, one state and one parks pump. Several ongoing programs in the state will fund more conversions in coming months. EP

Ron Kotrba is an Ethanol Producer Magazine senior writer. Reach him at rkotrba@bbibiofuels.com or (701) 738-4962.