EPA Should Delay E15 Waiver Decision Until All Testing is Complete

Briefing Paper – 8.16.10

The Environmental Protection Agency (EPA) has indicated it may take action later this year to
approve higher levels of ethanol in fuel blends—up to 15 percent—even though critical
vehicle tests and environmental analyses mandated by the Clean Air Act have not yet been
completed. While API and the industry support EPA’s goal to increase ethanol use in
conventional vehicles, any EPA action this year would be premature and could threaten
vehicle performance, void warranties, confuse consumers – and possibly create a public
backlash against renewable fuels.

Higher levels of ethanol blends in gasoline have not yet been proven safe or effective, and
it would be a mistake for EPA to act before all necessary testing is completed.

o The EPA is considering a petition from ethanol producers to allow the sale of gasoline
that contains up to 15 percent ethanol (E15). EPA has announced it plans to take action
in September on a waiver request to allow higher levels of ethanol in gasoline for vehicle
models 2007 and newer, and to make a determination in November for 2001-06 model
year vehicles.

o However, higher levels of ethanol have not been proven safe or effective according to
industry projections based on testing to date. Testing for engine and vehicle compatibility
with E15 and testing of environmental issues associated with higher levels of ethanol in
gasoline is scheduled for completion in 2011.

o The Coordinating Research Council (CRC), a non-profit organization made up of the

American Petroleum Institute (API), the Society of Automotive Engineers (SAE) and a
group of automobile manufacturers, has defined and is conducting highway vehicle
testing that is needed, both in terms of vehicle emissions issues and also in terms of
vehicle durability and consumer satisfaction.

o Testing is also being conducted by the Department of Energy, the EPA and industry on
the compatibility and functionality of the gasoline station equipment (tanks and pumps)
with E15. Potential problems with storage and/or dispensing equipment create additional
environmental risks associated with spills, leaks and consumer safety.

Sound science, environmental protection and consumer safety—not politics—must guide

this important decision.

o Section 211(f) of the Clean Air Act mandates a detailed scientific review before new
fuels, additives or fuel blends are introduced into commerce. EPA is in the midst of
carrying out this review, including soliciting public comment from all stakeholders on the
introduction of mid-level ethanol blends. This review must be allowed to continue before
any decisions are made.

o In a July 2010 letter to the EPA Administrator, Chairman Waxman and Ranking Member
Barton of the U.S. House Energy and Commerce Committee wrote, “Given the important
potential benefits of renewable fuels and the need to protect existing vehicles and
engines, we support the Department of Energy's efforts to conduct the necessary
compatibility testing and your decision to await those test results.”
EPA Should Delay E15 Waiver Decision Until All Testing is Complete
Briefing Paper – 8.16.10

API is working to implement renewable fuels blending (RFS2) mandates. The United
States needs all sources of commercially viable energy, and biofuels are an important
resource. However, reaching these goals cannot come at a cost that could put consumer
satisfaction at risk, create a public backlash and undermine EPA’s credibility.

o API strongly supports the Coordinating Research Council’s ongoing testing and research
activities. We share the concerns of automakers, boat and farm equipment
manufacturers, consumer groups, and environmental organizations that a premature
waiver by EPA could lead to serious vehicle and equipment performance and safety
issues.

o Equipment (dispenser) labeling of high-level ethanol blends to educate customers will

likely not prevent vehicle misfueling and damage claims. The Federal Trade Commission
and EPA should first complete their consideration of the issue. API has funded a
research report that identifies nearly 20 different options for addressing this concern.
However, until the CRC research is completed we will not know which of these options
will be required to protect the consumer.

o The pre-2001 vehicle fleet constitutes more than 45 percent of the registered vehicles in
the U.S. The EPA has not disclosed a plan to educate consumers about E15 usage. This
plan must include sufficient information so that consumers can choose the right fuel for
their engines.

o Nearly all vehicle owners’ manuals specify that no fuel containing more than 10 percent
ethanol should be used. Fuels with more ethanol could void the manufacturer’s warranty.
EPA’s complicated waiver approach will only confuse consumers and risk voiding their
vehicle’s warranty.

o Risking consumer support now compromises the future success of mid-level ethanol fuel
blends. In their letter to EPA, Waxman and Barton wrote, “Allowing the sale of
renewable fuel in a way that damages equipment, shortens its life, or requires costly
repairs will likely cause a backlash against renewable fuels. It could also seriously
undermine the agency's credibility in addressing fuel and engine issues in the future.”