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EPA proposes further increases in ethanol amounts, wider E15 distribution

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Photo by Todd Ehlers.

Preliminary figures released by the Environmental Protection Agency earlier this week call for adding 300 million more gallons of ethanol to the nation’s fuel supply next year, a number that continues to break the blend wall but that agency administrators believe will be possible by mandating increased distribution of E15 and higher blends.

The total proposed amount of ethanol to be added to the fuel supply, according to the EPA’s Proposed Renewable Fuel Standards for 2017, released on Wednesday, would increase from 2016’s 18.11 billion gallons to 18.8 billion gallons, numbers that include advanced biofuels. While the latter number falls short of the figure that Congress set forth in the Renewable Fuels Standard in 2007, it nevertheless represents about 10.44 percent of the nation’s fuel supply, beyond the 10.1 percent of the 2016 figures and the estimated 10 percent considered by some to represent the maximum amount of ethanol the market will tolerate.

With E10 already widely distributed, pretty much the only way to continue increasing the percentage of ethanol in the fuel supply is for higher-blend fuels, including E15, to make more headway in the market. To that end, the EPA promised in Wednesday’s proposal to increase the supply of those higher-blend fuels.

“We are currently considering and evaluating regulatory provisions that should enhance the ability of the market to increase not only the production of advanced and cellulosic biofuels but also the use of higher-level ethanol blends such as E15 and E85,” the agency wrote. “We believe it is highly unlikely that Congress expected those volume targets (in the RFS) to be reached only through the consumption of E10.”

What exactly those measures would be the agency didn’t elaborate, though it did mention developing new vehicles and new engines capable of using higher-blend fuels as a possibility.

The proposals have drawn criticism from both pro- and anti-ethanol groups. The former took the agency to task for not following to the letter the amounts specified for 2017 (originally released in 2007), specifically for falling short of the legislated amount of conventional (corn-based) ethanol by 200 million gallons, or less than 1 percent.

“The agency continues to cater to the oil industry by relying upon an illegal interpretation of its waiver authority and concern over a blend wall that the oil industry itself is creating,” Renewable Fuels Association President Bob Dinneen said in a statement.

Dinneen did not similarly criticize the EPA for falling short of projected cellulosic biofuel or advanced biofuel amounts by 5.19 billion gallons (or 94 percent) and 5 billion gallons (or 55 percent), respectively.

Meanwhile, the Environmental Working Group said in a statement that the Renewable Fuels Standard and the EPA’s proposal are making a bad situation worse and that the legislation needs to be overhauled.

The EPA’s proposal “continues a wrong-headed policy that promotes a fuel that is bad for the environment, rather than pushing the market toward better renewable fuel options,” the EWG’s Emily Cassidy said.

Both ethanol proponents and opponents have filed lawsuits against the EPA over the renewable fuel figures the agency released last year.

As for legislation designed to curb the blending of ethanol into fuel, the recently introduced Food and Fuel Consumer Protection Act of 2016, which would cap annual blending requirements at no more than 9.7 percent of the nation’s fuel supply (translating to about 17.47 billion gallons according to Wednesday’s numbers), remains in the House Committee on Energy and Commerce. The RFS Reform Act of 2015, which would prevent the sale of any fuel with a higher ethanol content than E10, also remains in the House Committee on Energy and Commerce.

The EPA has set a public hearing for the proposed 2017 amounts for June 9 in Kansas City, Missouri. The public comment period for the proposal will remain open until July 11. The EPA’s final ruling on blending amounts is due by November 30.