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Refiners Sound Warning on Ethanol Blending
Copyright © 2009 Energy Intelligence Group, Inc.  (click for details)
Thursday, April 2, 2009
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The US refining industry told a Senate panel on Wednesday that ethanol should not be blended into gasoline at concentrations greater than 10% until comprehensive scientific testing shows that so-called "mid-level ethanol blends" are safe for consumers and their vehicles.

Charles Drevna, president of the National Petrochemical and Refiners Association (NPRA), told a subcommittee of the Senate Environmental and Public Works panel that mid-level ethanol blends could harm gasoline-powered engines and may lead to increases in emissions from these engines that could harm the environment and public health.

"Our joint message should not be characterized as anti-ethanol. Our organizations are not opposed to the prudent development and use of biofuels, including ethanol, to diversify our nation's transportation and nonroad fuels portfolio," Drevna said.

"However, before the use of mid-level ethanol blends is permitted, we must ensure that these blends are safe for consumers, do not harm gasoline-powered engines, and do not lead to increases in emissions from these engines that will harm the environment," he added.

In addition to representing US refiners, Drevna was also testifying on behalf of the National Marine Manufacturers Association (NMMA) and the Outdoor Power Equipment Institute (OPEI).

The issue of mid-level ethanol blends has come to the fore because of a 2007 energy law that mandated a steady increase in the use of renewable fuels until 2022, when 36 billion gallons per year of biofuels are expected to be blended into transportation fuels.

The idea is to reduce dependence on oil by making greater use of biofuels, but the issue of how to reconcile this with the ethanol "blend wall" of 10% -- the maximum concentration allowed under current regulations -- was not fully considered.

The blend wall debate is picking up steam now as the mandate ramps up. In 2008, about 9 billion gallons of ethanol were blended into transportation fuels, and the mandate calls for about 11.1 billion gallons this year, bringing the level ever closer to the 10% limit.

According to the US Energy Information Administration (EIA), US gasoline consumption amounted to 139 billion gallons in 2007 and 135 billion gallons in 2008. Since ethanol currently is blended into about 75-80% of all the gasoline sold in the US -- generally at a blend rate of 10% -- the US has not yet hit the blend wall. However, with the economic recession taking its toll on gasoline demand, that day could arrive sooner than previously expected.

"If gasoline demand in the United States declines in 2009 at the same rate it did in 2008, then our country could reach the E10 saturation point as soon as 2011," Drevna said. He cited EIA forecasts predicting that gasoline demand this year will decline by a total of 10% compared with 2007.

The Environmental Protection Agency (EPA) is currently performing a scientific review on the impact of mid-level ethanol blends on gasoline engines and emissions with an eye on increasing the blend wall to 12-13% in the near future and to 20% further down the line. President Barack Obama remains a big backer of biofuels. He campaigned on a plan to nearly double the existing renewable fuels mandate to 60 billion gallons per year by 2022.

For Obama and many Democrats, the allure of biofuels lies in the amount of oil it displaces. Last year, ethanol displaced about 630,000 barrels per day of oil. By 2022 -- if currently mandated levels are reached -- that total would jump to around 2.5 million b/d, equal to the amount of crude the US now imports from Venezuela and Saudi Arabia combined.

But some members of Congress are raising questions about whether the mandate can be sustained.

"Few could dispute that Congress erred in pushing too much ethanol too fast. In this light, I encourage EPA to reject calls to short-circuit its regulatory obligation and instead fully utilize sound science to determine the feasibility of mid-level ethanol blends," said James Inhofe (R-Oklahoma), ranking member of the committee.

Inhofe said the "overly aggressive mandate" has led to a consumer backlash in parts of the country, as complaints abound that ethanol hurts gas mileage and chokes the engines of boats and motorcycles.

Paul Merolli, Washington


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