A 30% Ethanol Stand

OMAHA (DTN) -- Farm leaders and state officials in South Dakota are taking the lead to push 30% ethanol blends and challenging EPA's stance on higher ethanol blends.

By taking the lead to aggressively support E30, South Dakota is positioning itself for a potential legal battle with EPA, especially if EPA chooses to declare that selling E30 at the pumps violates the law.

Doug Sombke, president of the South Dakota Farmers Union, said ethanol backers in his state have been looking at this issue for years. Ethanol leaders in South Dakota specifically want EPA to come in and challenge the use of E30 to spark a legal battle.

"We have found lawyers that agree with us and that EPA has overstepped its bounds and not acting when it comes to E30 and clean air," Sombke told DTN in an interview. "They (EPA) don't want to push the legal argument, which increases my view that we are right."

At its annual meeting last week, the National Farmers Union passed a policy resolution calling on EPA to open the market to higher ethanol blends. The group stated it is taking a stand against EPA regulations that limit the use of ethanol in non-flex vehicles.

The South Dakota Farmers Union is asking its members to take an "E30 challenge" in the state. Glacial Lake Energy has been doing the E30 Challenge for the past 18 months. Multiple retail locations in Watertown offer higher blended fuel. The results of the challenge show that non-flex-fuel vehicles can use higher ethanol content because the higher blends provide the vehicles with higher octane.

The E30 push comes as EPA has a proposed rule seeking to restrict 16%-83% ethanol blends strictly for flex-fuel vehicles. A coalition of groups led by the Urban Air Initiative have filed comments declaring that EPA's view on mid-range ethanol fuels is flawed. The E30 challenge is essentially a state-driven effort to resist the EPA proposal.

"I have yet to see a vehicle problem because E30 was run in a non-flex-fuel vehicle," Sombke said.

Beyond South Dakota, Sombke said he has gotten calls from farmers in Nebraska and other states asking how they can start the same kind of E30 challenge. "I'm looking forward to educate others on what we've done in Watertown and how we are expanding it in other cities in the state," he said.

The South Dakota Legislature also has gotten on board. In February, both chambers of the legislature passed a resolution urging Gov. Dennis Daugaard to fuel the state fleet of vehicles with E30 fuel. State officials have since put out bids to ethanol plants about supplying 30% ethanol.

Last week, Daugaard joined a letter with Iowa Gov. Terry Branstad and Nebraska Gov. Pete Ricketts to President Donald Trump calling on him to support expanded efforts for biofuel production. One request in the letter was to "remove barriers to the use of higher ethanol blends."

A stir in the ethanol industry was sparked last month when it was reported the Trump administration was willing to cut a deal changing the point of obligation for the Renewable Fuel Standard in exchange for granting the Reid vapor pressure waiver for E15. That vapor pressure rule essentially blocks E15 from being used nationally because it restricts the use of the fuel in the summer months. That's why there are so few fuel stations across the country willing to invest in pumps for 15% ethanol. Yet, given that the Trump administration was willing to cut a deal on the vapor-pressure issue reflects there is no good science blocking the higher blends, just a long-standing EPA rule.

"Everybody knows there is no scientific basis on what they are doing," said Brad Brunner, ethanol marketing manager for Glacial Lakes Energy, who has been recording data and usage under the E30 challenge. "This makes no sense. What kind of marketing plan is that to not offer your best-quality fuel during the peak driving season? It is totally upside down. That's when you are going to have more pollutants and so forth and you can't burn a cleaner fuel?"

For decades, the burden of proof has been on advocates for higher blends of ethanol to prove that the fuel is not problematic for air and automobiles. E30 supporters say the burden really should be on EPA, not the industry, to show that there is a problem with the fuel.

"Everyone's been concentrating on the tailpipe rather than where the actual carbon and ignition is taking place in the engine," Sombke said. "That's where the issue comes from, and that's where our arguments are going to be successful."

Sombke compares the battle to Colorado and other states that have legalized marijuana even though the federal government continues to have laws against legalization.

"It's kind of the same thing we're talking about here with the fuel," Sombke said. "They are not allowing us to use what we see as a cleaner-burning fuel than what they are imposing on us today."

In Iowa, the focus has been more on expanding 15% pumps across the state. Lucy Norton, managing director for the Iowa Renewable Fuels Association, said more emphasis has been placed on using state and federal programs to expand blender pump infrastructure. She added that Iowa's state auto fleet is flex-fuel for 85%. The state of Iowa did release an energy plan late last year to start a pilot project on E30 fuels.

The Urban Air Initiative and others see E15 as a "no-growth strategy" in fuel demand. If auto manufacturers continue the move to vehicles with a higher fuel economy, then E15 over the next decade would translate into generating roughly the same amount of total ethanol use as the industry sees now under E10. Thus, it's important to move more aggressively to 30% blends.

"For the (auto) industry to get to where they need to for fuel economy, they are going to need to use higher ethanol blends as an octane enhancer," Sombke said.

Yet President Trump is expected to go to Detroit this week and meet with auto executives specifically to look at restarting the review for vehicle fuel economy standards.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(SK/AG)

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