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New Study, Continuing Problems with E15

Bob Greco

Bob Greco
Posted June 2, 2015

With EPA last week proposing ethanol-use requirements for 2014, 2015 and 2016 under the Renewable Fuel Standard (RFS), the ethanol industry no doubt will keep lobbying to foist increasing amounts of higher-ethanol blend fuels like E15 and E85 on the motoring public. This, despite studies that have shown E15 can harm engines and fuel systems in vehicles that weren’t designed to use it – potentially voiding manufacturers’ warranties – and historically small consumer demand for E85.

A subset of the argument for increased use of higher-ethanol blend fuels is the dismissing of concern that E15 also could damage existing service station infrastructure, including storage tanks, fuel lines and dispensers. Though service station owners and operators indicate otherwise, ethanol supporters say that a new National Renewable Energy Laborary (NREL) report – commissioned by the Renewable Fuels Association (RFA), a big ethanol advocate – found that E15 is compatible with existing equipment. It’s simply not true, and the report has some challenges. Let’s look at a few.

Storage tanks – These large pieces of infrastructure are generally OK – unless they aren’t. Appendix C of the NREL report says that single-wall tanks built from February 1981 through 2005 are “designed for the storage of ethanol fuel up to a 10% blend (E10).” That’s not E15, and there likely are many of these single-wall tanks being used in a number of service stations today.

UL Listing – The report says UL Listing “is not a requirement; some manufacturers simply prefer to have UL listings for their products.” This may be a news flash to the federal Occupational Safety and Health Administration and appears at odds with state-specific requirements like those in California, two major fire codes that require UL-listed equipment and insurance company provisions.

New Infrastructure – The report says there are “future opportunities for retailers to remove or replace their current equipment …” Certainly, there’s new service station equipment that’s compatible with E15, but according to an earlier NREL study (sponsored by the Energy Department, not the RFA), “New stations are not opting to install E25 or E85 listed equipment due to the greater cost of equipment and the expectation of low demand for ethanol blend fuels.” The opportunity to invest significant sums of money on E15-compatible infrastructure doesn’t mean a small business owner will take it – especially when market demand for a product is more hope than reality.

Liability – The new report appears to conclude that liability on the part of a station owner shouldn’t be a concern, noting that EPA “has never fined a station this amount [$37,500 per day], and it has the authority under code to reduce the fine based on business size.” Probably not enough reassurance for a small business owner.

Misfueling Potential – The new report raises the issue of consumers accidentally putting the wrong fuel in their vehicles – but doesn’t mention that E15 is not suitable for fueling in about 90 percent of the current fleet, based on auto manufacturer owner’s manuals, and that the use of E15 may void a vehicle’s warranty. As the chart below shows, that’s a lot of vehicles and a lot of vehicle owners for whom omitting such information is critically important:

automakers

Biofuel Compatibility – The new NREL report says the Office of Underground Storage Tanks “believes that while most biofuel blends are compatible with tanks and pipes, there could be issues associated with UST (underground storage tank) equipment.” That’s fine, but it’s a bit misleading. Let’s let EPA finish the thought using its July 5, 2011, Compatibility Guidelines: “If the UST owner and operator is not able to demonstrate that the UST system is made of materials that are compatible with the ethanol blend [e.g., E15] or biodiesel blend stored, according to [the regulations], the UST owner and operator may not use the system to store those fuels.” Sounds like a problem.

Fire Codes – The new report fails to give a meaningful explanation of the need to meet all of the requirements of the fire codes that require equipment to be listed. The report further states that the California Air Resources Board (CARB) “requirements are not for equipment use with specific fuels [e.g., E15].” But, if you look here, you’ll see an example of a CARB-approved system that “Identifies that these components are only approved for standard gasoline fuel blends [e.g., blends up to 10 percent].” So, yes, CARB does specify which components are compatible with specific fuels.

Federal vs. State – Soon after EPA’s Compatibility Guidelines were released, the Illinois State Fire Marshal’s office (OSFM) sent a letter to underground storage tank owners telling them that EPA would be applying its guidance during inspections of state UST facilities and that prior state alternatives were now unacceptable. The letter says: “Therefore, UST systems storing biofuel blends containing greater than 10% ethanol or 20% biodiesel which can demonstrate compatibility under the existing OSFM rules may, nonetheless, be in violation of federal rules, as interpreted by US EPA.” The letter goes on to say the state will require “proof of compatibility at their regular site inspections ...” So, why wasn’t Illinois or the other 48 states included in NREL’s analysis? Just asking.

Records, Records – The report says, “There is no regulation that requires station owners to keep records of their equipment, making determination of compatibility challenging for stations without equipment records.” Agreed. The majority of existing equipment in the ground cannot be proven to be compatible with E15. So when the American Coalition for Ethanol (ACE) concludes that “most underground storage tanks (USTs), piping, and other fueling equipment are already compatible with E15,” you’ve got to wonder about the basis for ACE’s conclusion.

Stepping back from NREL’s confusing report, let’s look at the options. There is E15- and E85-compatible equipment that can be bought, which the retail marketer can install or use to replace existing equipment. But drawing the broad conclusion, as ACE does, that “the existing infrastructure is compatible with E15,” isn’t supported by the new NREL study. 

Here’s a suggestion: If the ethanol industry believes that existing service station infrastructure is compatible with E15, it can offer any retailer who wishes to sell E15 indemnity against potential damage to the station’s infrastructure. If there are fuel releases from underground storage tanks, the ethanol industry can offer to pay for the cleanup. Likewise, if there’s damage from using E15 in a vehicle that wasn’t designed to use it, the ethanol industry can offer to cover it. Certainly, the ethanol industry is welcome to buy service stations and sell E15 and other higher-ethanol blend fuels itself.

Until then the science showing that E15 can damage some vehicle engines and fuel systems should be the guide. And service station owners who could be saddled with equipment replacement costs and cleanup bills should be excused for not forging ahead simply because an ethanol industry-commissioned study says E15 is nothing to worry about.

ABOUT THE AUTHOR

Bob Greco is group director of downstream and industry operations at the American Petroleum Institute. With 21 years of experience, Bob directs activities related to refining, pipeline, marketing, and fuels issues. He has managed exploration and production activities, policy analysis, climate change issues, marine transportation, refining, gasoline and jet fuel production issues and Clean Air Act implementation efforts. Before coming to API, Bob was an environmental engineer with the U.S. Environmental Protection Agency, with expertise in automotive emission control technologies. He has a M.S. degree in environmental engineering from Cornell University and a B.A. in biology from Colgate University.