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New bill aims to formalize ethanol blend wall, cap blending at E10

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Photo by Michael Cote.

A bill introduced in Congress this week promises to roll back current ethanol blending requirements and may even curtail the spread of E15 through the nation’s fuel supply should it get enacted.

House Resolution 5180, titled the Food and Fuel Consumer Protection Act of 2016, calls on the Environmental Protection Agency to set annual ethanol blending volume requirements at no more than 9.7 percent of the country’s anticipated fuel consumption. In addition, if the EPA should fail to meet its annual deadlines for setting the volume requirements – as has happened in the past – the bill would have those numbers revert to the most recent year’s totals rather than remain undefined.

The 9.7 percent figure cited in the bill would effectively formalize the ethanol blend wall, the theoretical maximum amount of ethanol the U.S. fuel supply can tolerate. Observers had pegged the blend wall at 10 percent since the Renewable Fuel Standard was enacted as part of the Energy Independence and Security Act of 2007. However, when the EPA finalized its ethanol requirement numbers for 2016 late last year, calling for 18.11 billion gallons of ethanol to be added to the fuel supply, it broke through the blend wall for the first time in history, raising the percentage to 10.1 percent.

That figure eclipsed those for 2014 (16.28 billion gallons, or 9.2 percent), 2015 (16.93 billion gallons, or 9.5 percent), and even previous EPA estimates for 2016 (17.4 billion gallons, or 9.7 percent). The EPA’s estimated blending requirements for 2017 are currently under review by the White House’s Office of Management and Budget.

“Market conditions have dramatically changed since 2005 and 2007, when Congress created and subsequently expanded the RFS. Since that time, gasoline demand has fallen and is well below the volumes implied by the ethanol mandates in the 2007 statute,” said Texas Representative Bill Flores, one of the sponsors of the bill. “As a result, the legacy RFS formula has now caused a situation where the ethanol mandate exceeds the maximum amount of ethanol that can be efficiently blended into gasoline under real-world market conditions… Higher ethanol blends of this nature are harmful for small engines, engines for recreational vehicles and older vehicle engines.”

While neither the ethanol blend wall nor the EPA blending requirements directly translate to the proportion of ethanol in a gallon of gasoline at the pump, the bill’s proposed cap of 9.7 percent would theoretically prevent wider distribution of EPA-approved E15 without a corresponding increase in distribution of ethanol-free gasoline and thus keep E10 the most widely available form of ethanol-blended fuel.

Yet as the American Motorcyclist Association – an outspoken opponent of ethanol-blended fuels – pointed out in regards to H.R. 5180, the need for such a bill comes after the nation’s supply of ethanol-free gasoline decreased “to just 130 million gallons from 9.2 billion gallons in 2016, despite the fact that the demand for E0 doubled.”

That lack of supply has already forced at least one state, South Carolina, to officially stop sales of ethanol-free premium gasoline. While sub-premium ethanol-free gasoline will remain available in the state, any 91 octane or higher fuel sold there will have to be blended with ethanol.

Ethanol advocates spoke out in opposition to the bill, claiming that the reasoning behind the bill depends on “often debunked claims.” Bob Dinneen, president of the Renewable Fuels Association, noted that “this bill would gut the RFS” though he did not refute Flores’s claim that ethanol blended into fuel harms older vehicle engines.

Introduced on Tuesday by Flores, Vermont Representative Peter Welch, Virginia Representative Bob Goodlatte and California Representative Jim Costa, the bill has since been sent to the House Committee on Energy and Commerce.

Other legislation intended to restrict the sale of E15, including Goodlatte’s RFS Reform Act of 2015, has either stalled in Congress or been knocked down.

The EPA’s ethanol blending requirement proposals for 2017 are due November 30.