―EPA E15 Waiver Approval Is Premature – E15 Still Being Tested‖

Briefing Paper – 10.14.10

The Environmental Protection Agency (EPA) on Wednesday, Oct. 13, 2010 approved use of an
ethanol-gasoline blend containing up to 15 percent ethanol by volume (E15) for vehicle
models 2007 and newer. This decision pre-empts both the conclusion of ongoing industry
testing and environmental analyses mandated by the Clean Air Act. This premature decision
could threaten vehicle performance and the environment, void warranties, confuse
consumers — and possibly create a public backlash against renewable fuels.

Introducing higher levels of ethanol blends in gasoline have not been proven safe or
effective and run counter to manufacturers’ warranties and owner’s manual
recommendations for automobiles and other vehicles. EPA’s dismissal of industry
research on these fuels could lead to voided warranties and confusion among
consumers.

o An August 2010 Sierra Research study commissioned by API found that auto makers
have uniformly established 10 percent ethanol by volume as the maximum allowable
level in their owner’s manuals through the 2010 model year. Given this, manufacturers
may take the position that they are not required to address adverse impacts caused by
the use of E15 in existing vehicles under either their normal warranties or the emission
control system warranties required by EPA.

o The Coordinating Research Council, a non-profit organization comprised of API and a

group of automobile manufacturers, is continuing tests and studies regarding the impacts
that new transportation fuels, including E15, could have on engines, engine calibrations,
vehicle fuel pumps and sensors, emission control systems and on-board diagnostic
systems. This works needs to be completed before E15 can be reliably introduced into
the marketplace.

o Risks associated with the introduction of E15 go beyond vehicle safety and performance.
Materials used in the storage and dispensing of fuels have not been proven compatible
with E15, and could pose harm to the environment and the consumer pumping the fuel.

o Additionally, the Alliance for a Safe Alternative Fuels Environment, comprised of auto,
engine and outdoor power equipment manufacturers and retailers, submitted concerns to
the EPA on a number of issues, including:
 Engine operability problems, including loss of power, stalling and overheating
 Substantially shortened engine life due to enriched air-fuel ratios
 Catastrophic engine failures
 Incompatibility with fuel system materials
 Increases in exhaust and evaporative emissions levels

The EPA has not disclosed a comprehensive plan to educate consumers about E15 usage
despite direct requests from members of Congress concerned that the introduction of
new transportation fuels will raise a host of issues related to the compatibility of these
fuels with vehicles, engines, and the country’s fuel distribution and retail infrastructure.
Several years of industry and government cooperative work is needed before these new
fuels can be safely introduced to the marketplace.

o EPA’s complicated waiver approach could confuse consumers and lead to unintentional
use of the wrong fuel blends in millions of vehicles. EPA has decided to allow E15 use in
vehicles built in model year 2007 and later, but not to allow it for vehicles made before
―EPA E15 Waiver Approval Is Premature – E15 Still Being Tested‖
Briefing Paper – 10.14.10
2001 or off-road machinery. In addition, EPA is holding off on a decision on vehicles for
model years 2001-2006 until later this year. This could create considerable confusion in
the marketplace, damage to engines and vehicle safety issues.

o In a July 2010 letter to EPA Administrator Lisa Jackson, Chairman Waxman and Ranking
Member Barton of the U.S. House Energy and Commerce Committee asked “what plans,
if any, the Environmental Protection Agency (EPA) has developed to ensure that
increasing the permissible level of ethanol in gasoline is accomplished in a way that does
not present any potential harm to air quality, consumers' investments in cars, trucks, and
other engines and equipment, or small business owners' investments in gas stations.”

o A simple pump label will confuse consumers and not prevent misfueling. Consumers will
be confused if EPA proceeds with allowing some cars and trucks to use this fuel now and
others later, particularly when EPA acknowledges that E15 is not compatible with older
cars and trucks and small engines.

o The EPA has not disclosed its plan to educate consumers about E15 usage. This plan
must include sufficient information to educate consumers on fuel choice for their engines.
API has identified nearly 20 different methods of preventing misfueling. Until the DOE
and industry research is complete, we do not know which of these methods should be
used or if a new label is sufficient.

The premature approval of E15 blends would run counter to numerous federal and state
laws and regulations, as well as certifications and implementation plans, all of which are
designed for fuels containing no more than 10 percent ethanol by volume.

o Because all existing EPA certifications, as mandated by the Clean Air Act, were
performed using fuels containing no more than 10 percent ethanol, there is no means to
ensure that oxygenated fuels at their currently allowed concentration levels will continue
to conform to the EPA’s gasoline detergent additives requirements. The additional
ethanol dilutes these additives and changes the fuel composition.

o Therefore, changes to the EPA gasoline detergent additives regulations will be required
to ensure that additives are effective when used with E10+ blends in maintaining air
quality.

o In addition to federal fuel requirements, most states and some regions and localities
impose their own requirements on transportation fuels. For example, 22 states limit
gasoline-ethanol blends to 10 percent by volume, and a number of states also have
biodiesel blend caps.

o Changes to emission inventories associated with the introduction of E10+ and biodiesel
blends may have an impact on a state’s ability to meet the air quality standards that the
EPA approved.

The oil and natural gas industry supports the development of alternative fuels like E15.
However, given all of these issues, we are concerned that the premature introduction of
E15 to the marketplace could ironically undermine popular support for alternative fuels in
general and E15 in particular.
―EPA E15 Waiver Approval Is Premature – E15 Still Being Tested‖
Briefing Paper – 10.14.10
o API is working to implement renewable fuels blending (RFS2) mandates. Given the
current and projected worldwide energy demand, the United States needs all sources of
commercially viable energy, as well as a greater commitment to energy efficiency and
energy conservation. Biofuels, including ethanol, are an important resource.

o Oil and natural gas companies have long been pioneers in developing alternatives and
expanding our utilization of existing sources of energy. API members have invested or
committed more than $13 billion in biofuels.