Barbecues, Beaches and E15? You Bet

Summer is right around the corner, which means backyard barbecues, beach trips and flip flops. But unfortunately, it also means a restriction on the sale of higher ethanol fuel blends. This column appears in the May issue of EPM.
By Bob Dinneen | April 12, 2016

Summer is right around the corner, which means backyard barbecues, beach trips and flip flops. But unfortunately, it also means a restriction on the sale of higher ethanol fuel blends.  Starting June 1 and through Sept. 15, summer volatility restrictions are in place, preventing ethanol blends above 10 percent from being sold in nearly three-quarters of our nation's gasoline market.

Nearly 30 years ago, the U.S. EPA provided a 1-pound-per-square-inch (psi) waiver of the Reid vapor pressure (RVP) volatility requirements for certain ethanol blends. It did so in recognition of the fact that lower volatility blendstocks were not readily available in the marketplace and to encourage the increased use of renewable fuels. The agency also concluded, after extensive air quality modeling, that the 1-psi waiver would not result in increased ozone formation because reductions in exhaust hydrocarbons and carbon monoxide would offset the impact of potentially higher evaporative emissions.

Unfortunately, while EPA has given an RVP waiver to ethanol blends up to 10 percent, it has not extended the same waiver to any blends above that, frustrating millions of consumers who want to use E15 in their cars and trucks year-round.

Ironically, the RVP waiver—originally provided to expand the production and use of fuel ethanol—now is having the perverse effect of discouraging greater ethanol use in today’s gasoline market, and it is obstructing the successful implementation of important fuel and carbon reduction policies enacted since then, including the renewable fuel standard (RFS).

The Renewable Fuels Association repeatedly has urged EPA to extend the RVP waiver to E15, but the agency remains opposed. EPA has said it does not believe it has the statutory authority to extend the waiver. While we disagreed with EPA’s conclusion on that issue, another option available to the agency would be to simply require lower-RVP summertime conventional gasoline blendstocks for mixing with all ethanol blends.

Under the Clean Air Act, EPA has general authority to regulate the composition of fuels and it also has specific authority to mitigate any adverse effects on air quality based on the renewable volumes required by the act. These sections provide the agency with ample authority to require lower-RVP gasoline blendstocks, thereby reducing volatility across the board and removing the refining industry’s last excuse for achieving the renewable volume requirements mandated by Congress, while at the same time assuring even greater reductions in urban ozone formation.

An analysis completed for RFA in June 2015 evaluated a range of scenarios to determine the cost of lowering the RVP by 1 psi during the summertime. The most robust methodology found that removing the waiver would add 2 cents per gallon for refiners. Sales of summer conventional gasoline represent approximately 20 to 25 percent of total annual gasoline sales. Thus, when spread across total annual gasoline production, the refining cost impact of a 1-psi RVP reduction would be just six-tenths of one cent per gallon.

There also are emission benefits from removing the 1-psi RVP waiver. Modeling conducted by Air Improvement Resource, using EPA’s MOVES2014 tool, found that elimination of the waiver would reduce carbon monoxide emissions by nearly 16,000 tons per month in the summertime, nitrogen oxide emissions by more than 700 tons per month and volatile organic compounds by approximately 1,850 tons per month. The economic value of these emissions reductions alone would offset any negligible increase in refining costs.

RFA will continue to pursue any and all avenues to getting this situation resolved, including legislation, and we look forward to soon seeing E15 at your local gas station in the summer and year-round.

Author: Bob Dinneen
President and CEO,
Renewable Fuels Association