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API comment on RFS

Hydrocarbon Engineering,

Below are highlights from a statement made by Bob Greco, API Downstream Group Director on the Environmental Protection Agency’s proposed biofuel mandates for 2014, 2015 and 2016 under the Renewable Fuel Standard (RFS).

“The overarching problem with this regulation is the EPA’s assumptions of growing demand for high ethanol fuel blends are simply wrong. High ethanol blends, such as E15 and E85, that EPA is pushing are not compatible with most cars on the road today, and they could potentially put American consumers and their vehicles at risk.

“Most cars are only approved by the manufacturer to use ethanol blends of 10% or less. Extensive testing by the auto and oil industries shows that higher ethanol blends can damage engines and fuel systems, potentially leaving drivers stranded. EPA suggests that if refiners would produce and sell more E85, a fuel mixture of up to 85% ethanol with gasoline, they would be able to meet the ethanol volume requirements EPA is proposing.

“Only six out of every 100 cars can even use E85, but even those motorists have largely rejected the fuel. They have rejected it because a tank of E85 doesn’t get them as far. Ethanol contains less energy per gallon than gasoline. E85 has up to 23% less energy than standard E10 fuel. That means if your car normally gets 400 miles per tank of E10, it would get just over 300 miles per tank of E85. In other words, if you normally fill up four times a month with E10, you would have to fill up five times a month with E85.

“Gasoline marketers will tell you that these are huge hurdles to overcome. And, according to data from the Department of Energy, E85 costs more money in the long term because of the lower fuel economy. The difference may shock you. The Department of Energy estimates that annual fuel costs for a 2015 Chevrolet Impala, for example, will be US$1900 using regular gasoline. However, the average annual fuel costs jump to US$3000 if you fill up with E85. It’s like an added tax of US$1100 each year.

“Average annual fuel costs for a 2015 Ford F-150 pick up truck are US$2100 with gasoline but jump to US$3200 with E85. In fact, all of the flex fuel vehicles listed on the Department of Energy’s website show higher operating costs under E85 than for regular gasoline. For all these reasons, consumers have shown they have little to no interest in purchasing increasing amounts of high ethanol fuels. This stands in stark contrast to the consumer demand for E0, ethanol free gasoline.

“EPA has ignored the fact that consumers want E0 for their boats, for lawn equipment, and older vehicles. In 2014, E85 demand remained flat at just 0.15% of gasoline demand, while E0 represented nearly 7% of demand, up from 3.4% in 2012. AFPM and API support EPA’s use of its waiver authority to reduce the ethanol mandate, and we further urge EPA to set the final ethanol mandate to no more than 9.7% of gasoline demand, to protect consumers who want to purchase ethanol free gasoline."

Edited from speech by Claira Lloyd

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