Breaching the ethanol blend wall
On a fence-mending trip to the Midwest in April, EPA Administrator Lisa Jackson put on a hard hat to tour a biodiesel plant in Newton, Iowa. It was a media event. Cameras clicked as reporters watched Jackson and Ag Secretary Tom Vilsack peer at vials of vegetable oil in a lab and walk by steel tanks to a control room.
But Jackson also met privately with biofuels industry leaders. One was Jeff Broin, CEO of the ethanol company, POET, and a founder of the lobbying group, Growth Energy.
Ever since Congress passed the Energy Independence and Security Act in 2007, with an ambitious goal of having U.S. vehicles burn 36 billion gallons of biofuels by 2022, Broin has warned that we can't get there from here.
He points out that EPA's limit of 10% ethanol (E10) in unleaded gasoline amounts to a wall against blending even more ethanol into fuel.
We're at the wall. Today, the nation's capacity to make ethanol is about 14 billion gallons. Last winter, that was enough to supply slightly more than 10% ethanol for gasoline, according to the Department of Energy. To breach the blend wall, in March 2009 Growth Energy asked EPA to allow 15% ethanol (E15) in conventional gasoline. Not until October of 2010 did EPA have ample test results to approve it – and only for 2007 model vehicles or newer. Last January it OK'd cars and pickups sold for 2001 and later. Growth Energy hailed that as a huge market, more than half the vehicles on the road.
Yet, today, you'll have a hard time finding anyone selling E15, unless it's at a blender pump that lets you dial up from E10. EPA's labels and rules for the new fuel were released in late June but more regulations were waiting to be revised. The only vehicles that legally could buy E15 were flex-fuel models made to burn up to 85% ethanol.
Broin used his time with Jackson last April to push E15.
“We talked about E15 and the additional hurdles we have to get over,” he said afterward.
Underwriters Laboratories, Inc. hasn't approved pumps for E15, Broin says, even though “the pumps the UL claims can't pump E15 today have been pumping E85 for years.”
Broin wants EPA to approve higher Reid Vapor Pressure (RVP), a measure of gasoline volatility, for E15. At low levels, ethanol makes gas evaporate faster. Congress gave E10 a waiver from EPA's vapor pressure limits, but not E15.
It turns out that the list of barriers to E15 is even longer. So most retailers won't sell it for at least two more years. Ethanol has well-known troubles in Congress, but it's the blend wall that could soon cost farmers by putting downward pressure on corn prices. The 2007 energy law allows up to 15 billion gallons of ethanol from corn. The blend wall puts any expansion of ethanol that's not cellulosic on hold.
“E15 will take some time (measured in years) to hit the market and, like E10 before it, will mainly be a Midwestern fuel to start,” says Chad Hart, an Iowa State University economist who tracks the ethanol market as well as corn and soybeans.