WINTER 2010 ISSUE


A Strong Signal



In a letter to Growth Energy, the Environmental Protection Agency laid out a concrete path for approval of ethanol blends of up to 15 percent in our nation’s fuel.




On Dec. 1, ethanol advocates across the United States prepared for the Environmental Protection Agency’s long-awaited decision on whether to allow 15 percent ethanol in our nation’s fuel.


When the deadline arrived, the EPA issued a letter declaring that the U.S. does need higher ethanol blends and confirming that current evidence supports E15 use in America’s vehicles. A final decision, however, was delayed until the “mid-year timeframe” of 2010, after additional data from an Energy Department study was available. The decision was put off, but the EPA’s statements clearly point to an eventual approval.


“This announcement is a strong signal that we are preparing to move to E15, a measure that will create 136,000 new U.S. jobs, cut greenhouse gas emissions and lessen America’s dependence on imported oil,” said Gen. Wesley Clark, Co-Chairman of Growth Energy, which filed the initial Green Jobs Waiver for E15.


EPA LEANING IN FAVOR OF E15


People within the industry point to some key statements from the EPA’s letter to Growth Energy. The agency wrote:


“… our engineering assessment to date indicates that the robust fuel, engine and emissions control systems on newer vehicles (likely 2001 and newer model years) will likely be able to accommodate higher ethanol blends, such as E15.”


“To achieve the renewable fuel requirements in future years, it is clear that ethanol will need to be blended into gasoline at levels greater than the current limit of 10 percent.”


On top of that, the EPA is moving forward with labeling and education initiatives for the public about E15. A working group is being formed to help ease a transition to E15. Chris Thorne, Communications Director for Growth Energy said they will have a place in that group.


POET CEO Jeff Broin applauded the tone of the EPA’s statements and the effort to come up with a plan for educating the public.


“We were pleased that the EPA’s letter shows a clear path to E15,” POET CEO Jeff Broin said. “Without increasing the base blend of ethanol to E15, it will be impossible to achieve the targets set in the Renewable Fuel Standard and there will be no market for cellulosic ethanol. POET is spending tens of millions of dollars to commercialize the production of ethanol from harvest leftovers but needs E15 to be certain there will be a market for the product.”


Wall Street echoed that optimism, as the stocks of many publically traded ethanol companies improved following the EPA’s statement.


Nonetheless, many opponents to the waiver claimed victory.


“We are pleased that EPA has acknowledged our concerns with E15 and elected to delay final judgment until more studies can be completed. We continue to call for more testing on marine engines and boat fuel systems,” said Mat Dunn, NMMA Legislative Director with the National Marine Manufacturers Association in a press release.


Growth Energy is confident that future tests would support current evidence.


“While we believe the data included in the Green Jobs Waiver supports raising the blend to E15, critics have called for additional testing,” said Tom Buis, CEO of Growth Energy. “We are confident the ongoing tests will further confirm the data we submitted in the Growth Energy Green Jobs Waiver and silence those critics, allowing more American-produced energy to enter the market.”


A DIFFERENT APPROACH


The final ruling could fall short of approval for E15 in all U.S. vehicles.


The EPA statements indicate a different approach than a blanket waiver by specifically naming vehicles “2001 and newer model years.” This raises the possibility that the EPA will allow E15 for only that segment of the national fleet.


Thorne said that approach was not put forward by Growth Energy. However, it would still accomplish many of the goals of the Green Jobs Waiver.


“The decision to approve E15 for vehicles 2001 and newer is the choice of the regulatory agency, not Growth Energy,” he said. “That said, it is also true that most of the miles driven today, something like 80 percent, are in cars that are 2001 model year or later. About 70 percent of automobiles in the U.S. are 2001 model year or later, so we’re talking about the majority of vehicles in the country. And that number will grow each year.”


MORE WORK AHEAD


In the months since Growth Energy first filed the waiver request, ethanol advocates worked hard to spread the message about the benefits of ethanol and the positive things E15 could accomplish. People across the United States sent letters to the editor of local and national publications, comments to the EPA and messages to members of Congress.


Thorne said those efforts should continue until E15 approval is secured.


“Remember that we don’t have E15 yet,” he said. “It is very early to declare any kind of victory, despite the strong signal we see in the letter from EPA. So we need to continue to make sure the Administration and Congress know that support for ethanol remains strong. That would help make sure that no further regulatory obstacles are erected that could block access to ethanol.”


It is important to keep the momentum, but the ethanol industry is happy to have that momentum in the first place.


One of the biggest reasons E15 is so desperately needed is to provide a market for new processes like cellulosic ethanol. Thorne thinks that the indications from the EPA will loosen up some investment into that innovative technology.


“At its core, the effort to increase the blend to 15 percent ethanol is really about lifting the regulatory cap on the ethanol market,” Thorne said. “And if we are to draw additional private market investment in developing technologies, like cellulosic ethanol, we need access to a bigger market. By indicating likely support for E15 – lifting the regulatory cap on our market by 50 percent – EPA has already made a tremendous impact on the ethanol industry.”


On December 1, 2009, Growth Energy received the letter below in response to the Green Jobs Waiver filed in March 2009.





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