EPA Approves Higher Ethanol Content: What Does It Mean At The Pump?

October 13, 2010
Corn Ethanol Pump

Corn Ethanol Pump

The U.S. Environmental Protection Agency (EPA) has given limited approval to a plan that will allow normal pump gasoline to contain up to 15 percent ethanol.

Retailers are already allowed to sell a blend with ten-percent ethanol (sometimes called E10) at the pump. Ethanol is currently blended into about 70 percent of our pump gasoline nationwide; ten states require it to varying degrees; and in some regions of the country, you can't find any fuel that isn't E10.

The higher blend is approved for vehicles from the 2007 model year or newer; the agency is still considering the impact it might have on vehicles from the 2001 through 2006 model years.

Ethanol for these blends is typically produced from corn and has strong support from agriculture interests. Based on a Congressional mandate from 2007, refiners will have to blend 36 billion gallons of biofueld into vehicle fuel by 2022. The EPA has said that this mandate can't be fulfilled without a higher-ethanol blend.

Growth Energy, a trade group headed by retired army general Wesley Clark, formally petitioned the EPA last year and has been one of the groups most aggressively pushing for E15.

The auto industry and environmentalists have sided together in opposing it, however. A number of groups associated with food production have anticipated that it might lead to higher food prices, due to larger swaths of land being dedicated to corn for ethanol, and higher prices on feed corn for livestock. Meanwhile, this year's corn crop is anticipated to be smaller than originally expected, according to the U.S. Agricultural Department, and volatility in commodities prices for grain—corn being one of those—is expected to grow worse next year.

The Department of Energy still hasn't yet adequately tested vehicles, the industry argues, and they could be harmed by the higher percentage. According to the Association of International Automobile Manufacturers, says AutoWeek, it could affect engine durability, driveability, emissions, and on-board diagnostics systems. Particularly of concern are emissions and exhaust-system durability and fuel-tank integrity.

The Alliance of Auto Manufacturers, which represents seven automakers, has urged the need for more research and is concerned with the time frame of the phase-in, as engine development is often done several model years in advance.

Several vocal groups of classic-car hobbyists, as well as users of boats, mopeds, and motorcycles insist that higher ethanol blends will do more damage. Though it depends who you ask; recently a group that—not surprisingly, represents ethanol interests—found in a study that even E15 will do little or no harm to some of the oldest cars on the roads.

Meanwhile, a number of environmental groups have argued that using more corn ethanol could result in increased greenhouse-gas emissions and cause groundwater issues; other crop possibilities that aren't so reliant on water and cropland, employing cellulosic ethanol methods, are more promising for the future.

So what will it mean? Probably very little for now; even in the corn belt, you'll likely be able to get E10 for some time. Though classic-car owners might, at some point, be challenged to even find E10.

The EPA will soon be soliciting comment on how pumps with the E15 blend should be labeled.

And be sure to let us know what you think in the poll below.

[Wall Street Journal; AutoWeek]

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