Clean Octane Alliance Sees Open Road for Higher Blends – Efforts to Derail Regs Rule Successful

Lost in the celebration over the Trump Administration’s recent announcement to allow year-round E15 sales was a decision by EPA (Environmental Protection Agency) that could have far greater impact on future ethanol demand, according to members of the Clean Octane Alliance a group recently formed by National Farmers Union, Farmers Union Enterprise, the Urban Air Initiative and the Clean Fuels Development Coalition to promote mid-level ethanol blends with a particular focus on the fuel economy and GHG rule proposed by the Trump Administration.

 “We certainly appreciate the Trump pledge to address seasonal restrictions on E15 but it is critical to make sure this vapor pressure relief applies to all blends above 10 percent given the limited demand E15 would provide and the fact that blends like E30 will provide substantially greater health benefits at lower costs,” said South Dakota Farmers Union President Doug Sombke.

 Sombke, along with Urban Air Initiative President Dave VanderGriend said an update to the master list of future federal regulatory actions called the Unified Agenda does not include a previously proposed rule that would make any blends above E15 illegal to use in conventional vehicles.  Known as the REGS (Renewable Enhancement and Growth) Rule, it would have codified a proposal that would have limited any future blends at a time when future vehicle efficiency requirements will need low carbon, high octane fuels that ethanol can provide in blends of 25-40 percent.  

 National Farmers Union and Urban Air Initiative led the effort to have the Renewable Enhancement and Growth rule dropped or modified and wrote then EPA Administrator Scott Pruitt informing him National Farmers Union would challenge this provision in court if necessary. 

 According to Sombke, future demand from E15 will likely be slightly more than 1 billion gallons over current levels in the next five years. He argues that would represent a new corn demand of just 300-400 million bushels that is not nearly enough to turn around the falling farm economy.

 Moreover, said Sombke, the increase from E15 may not even cover the demand loss from the small refiner waivers being granted by EPA that have reduced the Renewable Fuel Standard requirements by more than 1 billion gallons. “I think the agriculture and ethanol industries were so focused on the Renewable Fuels Standard and related issues, that this provision limiting ethanol blends might have slipped by,” Sombke said.  “At National Farmers Union we recognize the future is in much higher blends, which is why we were all over EPA to pull back this ill-advised rule.”

 According to S.D. Farmers Union analysis, a new octane standard of 98-100, as is being discussed at EPA, could result in increased ethanol demand of 15 billion gallons and corn demand of 4 to 5 billion bushels.

 Urban Air Initiative President Dave VanderGriend said ethanol blends in the 25-30 percent range can provide a significant octane boost and, more importantly, reduce the toxic carcinogens currently used by refiners to boost octane.

 “We are demonstrating the effectiveness of E30 across the Midwest and the savings to consumers while protecting their health is tremendous. We are showing that conventional automobiles are performing perfectly with this cleaner, homegrown fuel and EPA has no grounds to limit the amount of ethanol we can use,” VanderGriend said.

 The Rule was moved from the pending action category to what they call “long term action,” indicating it is unlikely to be brought forward. VanderGriend said they intend to monitor the situation but are encouraged that their efforts seem to have produced results.