RFA anticipates E15 roll-out to begin soon

By Kris Bevill | March 20, 2012

After receiving the U.S. EPA’s approval for a model Misfueling Mitigation Plan for E15 on March 15, the Renewable Fuels Association is moving ahead with an aggressive effort to educate fuel retailers on compliance requirements and assist them in completing the necessary steps to provide E15 to their customers. RFA President and CEO Bob Dinneen said in a March 19 conference call that the EPA’s role in approving E15 for consumer use is now largely completed and he expects the fuel to be available for sale in certain areas very soon. “The job now is largely the industry’s to make E15 a commercial reality,” he said, adding that more than 20 companies have submitted E15 registrations to the EPA, signaling their intent to sell E15. The EPA has approved those registrations and is expected to announce the approvals soon, according to Dinneen.

As part of its MMP, the EPA requires companies to create and fund E15 fuel surveys, which will require samples of E15 and other surrounding fuels to be tested for ethanol content and Reid vapor pressure on a quarterly basis. The surveys will also be used to verify the correct placement of required E15 labels on dispensers. The RFA’s initial model MMP did not include a fuel survey, but the group has worked for months to develop a comprehensive and affordable survey plan and Dinneen said the EPA has also recently approved the RFA’s survey plan. He expects the RFA to make it available for use by producers and blenders soon, which will complete the federal E15 regulatory requirements, leaving only state-based regulations to be modified to allow E15 into the market. Kristy Moore, RFA vice president of technical services, said some states have already taken steps to approve E15 for use in 2001 and newer vehicles and the RFA expects retailers in ethanol-friendly Iowa, Illinois and Kansas to be the first to sell the fuel. According to Moore, those states could introduce E15 in just a few weeks.

In order to assist retailers in navigating through the various regulatory requirements related to E15, the RFA has published a 44-page E15 Retailer Handbook with the goal of providing retailers comprehensive information in simplified terms, making it as easy as possible for retailers to make E15 available to consumers. “Even though E10 and E15 are nearly identical fuels, there is some additional regulatory work with E15 and we want to make that as less cumbersome and burdensome as possible for the marketplace,” said Kristy Moore, RFA vice president of technical services. By March 19, the RFA had distributed the handbook to more than 13,000 retailers nationwide. The organization is also requesting that its members help distribute the handbook locally and walk retailers through the process of making E15 available. As retailers begin offering the fuel, the RFA plans to expand its educational efforts to focus on consumers in areas where E15 is sold.

Robert White, RFA marketing director, said the BYO Ethanol campaign, a joint venture between the RFA and the American Coalition for Ethanol to educate retailers on the benefits of blender pumps, will also play a role in E15 education efforts because blender pumps are the least expensive way for retailers to offer E15. There are currently only about 350 blender pumps offering mid-level ethanol blends nationwide, according to White, but several thousand blender pumps are installed and could be used to dispense E15. He said the RFA has fielded an increasing number of calls from interested retailers in the past month and, considering the price differential between ethanol and gasoline, the group expects E15 to quickly gain traction in the market upon its introduction. However, White said they don’t expect E15 to push E10 out of the marketplace, due to the large number of vehicles and small engines that will continue to require the lesser blend. “We think E15 will be an addition and, if it has to replace one of the unleaded products, it will most likely be a premium, followed by a mid-grade,” he said. “And obviously if they have an additional tank where they could put in E85, they can use blender pumps and offer E15 and not give up any of their unleaded products.”

Dinneen noted that because ethanol is currently less expensive than gasoline, marketers should be able to offer E15 to consumers for a less expensive price than E10 or any other fuel. “We think it’s a critically important factor for consumers across the country to have this fuel available to them,” he said. However, there remain a number of lingering concerns that may prevent some retailers from selling E15. The EPA’s summer RVP requirements allow a one-pound waiver for E10, but not E15, which would make it difficult and expensive for blenders to offer E15 in areas that require reformulated gasoline in the summer months. The RFA continues to assert that there is no difference in the volatility between E10 and E15 and is continuing to work with the EPA to convince the agency to grant a similar waiver for E15, according to Dinneen. Additionally, some retailers have said they will not sell E15 until liability concerns related to vehicle warranties are alleviated. Dinneen said the RFA is collaborating with a group of refiners, marketers and auto manufacturers to draft legislation that would address those concerns. The bill has not yet been introduced, but Dinneen indicated it may be put forth in the near future.