Regulatory bottleneck limits ethanol

Cattle Market & Farm Reports, Editorials
Nov 19, 2007

In a video produced by the American Coalition for Ethanol (ACE), scientists from the Lake Area Technical Institute in South Dakota disassemble the engine of a 2000 Chevrolet Tahoe.

Part by part, they compare what a year’s worth of driving on E85 has done to a standard engine—and part by part, the technicians show that the engine is in better shape than a comparable engine run on regular unleaded gasoline.

Despite the positive results, ACE officials say they would not recommend burning E85 in standard vehicles. But the test demonstrates what could be a pivotal point in ethanol’s future: Maybe, just maybe, standard vehicles will be able to run on higher ethanol blends (though not as high as E85) without ruin.

Two things have prevented the use of higher blends thus far. One is federal regulatory hurdles. The other is the automakers, who won’t warranty engines to be used with blends higher than E10.

Now there’s a chance the regulatory hurdles will come down. There’s no guarantee it will happen, but the government is taking another look.

One concern the U.S. Environmental Protection Agency (EPA) has, according to the Natural Resources Defense Council (NRDC), is that higher blends have the potential to increase harmful emissions that contribute to air pollution. Those pollutants include nitrogen oxides, volatile organic compounds and carbon monoxide.

However, newer model vehicles are better equipped to reduce harmful emissions, making it less likely that higher ethanol blends would contribute significantly to additional air pollution, according to NRDC.

Federal approval to use such blends in standard vehicles would create a much larger market for an industry that is about to hit the E10 “blending wall” as new ethanol plants continue to come on line.

Brian Jennings, ACE executive vice president, said his organization shares the same sentiment that the federal agencies do in wanting to thoroughly study the potential effects of using higher ethanol blends.

“I wouldn’t go so far as to say frustrated,” he said. “We have a vested interest in ensuring that a fuel blend—whether E10, E20, E30, etc.—is going to be compatible with autos, that the fuel will work effectively and efficiently, that it will be safe, reliable and meet EPA emissions regulations. So, we recognize the hoops are in place for a reason. I think our concern is how would-be opponents might try to draw out the process and stand in the way. After all, we would be attempting to increase our market share.”

The day when higher ethanol blends will be available to standard vehicles, however, is squarely in the hands of the U.S. Department of Energy (DOE), EPA and the U.S. Department of Transportation.

Margot Perez-Sullivan, EPA media representative, said EPA and DOE have been looking at higher ethanol blends since the establishment of the Renewable Fuel Standard (RFS) in the 2005 Energy Act.

At this time, she said, the federal government will not share results of testing that is ongoing on the current U.S. vehicle fleet.

“When we have results, we will make a public announcement,” Perez-Sullivan said.
Denny DeVos, director of corporate finance for Sioux Falls, SD-based ethanol producer Poet, said that regulatory bottlenecks are a major constraint to additional ethanol sales, rather than poor ethanol economics or an RFS that’s too low.

Federal authority to allow blending of ethanol above the legal 10-percent cap, he said, would be the fastest, most effective way to cure the ethanol industry’s current glut.
Simply increasing the RFS up to a proposed 36 billion gallons from the current 7.5-billion-gallon cap by itself won’t fix the problem, DeVos said.

“The nation’s non-flex fuel vehicles could use ethanol blends of 20 to 40 percent without harming the environment and without the infrastructure challenges of E85. “It’s definitely very safe to blend ethanol at 30 percent without engine modification,” DeVos said. Higher blends up to 40 percent are the “upper operating range” of what oxygen sensors can detect in today’s engines.

At $93-per-barrel crude oil, he said blenders could make an estimated $1 more per gallon with ethanol than using conventional gasoline, with federal tax credits included.

The reason blenders aren’t doing it now with crude oil approaching $100 per barrel is that retailers can’t sell more ethanol because of federal regulatory barriers, DeVos said.
Federal studies are underway looking at both exhaust emissions and evaporative emissions from the fuel blend or blends we would want approved, Jennings said.

Scientists are looking at materials compatibility—immersing parts and materials in the higher ethanol blends to compare how they react versus how those same materials react to gasoline.

Jennings said the work also includes studying drivability and durability, or how well cars operate on the higher blends, and the potential health effects and air quality.

In 1999, ACE published the results of a year-long study conducted at Minnesota State University in Mankato; the study looked at the effects E30 and E10 ethanol blends had on 15 different vehicles including Ford, Chevrolet, Oldsmobile, Buick, Dodge, Cadillac and Geo, ranging in year from 1985 to 1998.

The study found a reduction in fuel economy on E30 and “no apparent trend in vehicle emissions was identified,” the study said. “Some emissions increased, while others decreased. Almost all emissions were below federal standards.” Researchers applied the same vehicle-emissions test used by EPA, the study said.

“There was not one drivability problem reported during the study,” the study said. “There were no fuel system compatibility problems experienced by any participants.”

If the federal government decides to allow higher blends, attention will turn to whether the automakers will warranty cars for their use.