Fuel Waiver Opens Door for E15

OMAHA (DTN) -- The U.S. Environmental Protection Agency on Wednesday granted an expanded fuel waiver to 12 states in response to concerns about fuel shortages from Hurricane Harvey, a decision that is likely to open up some E15 sales in those states through Sept. 15.

EPA expanded a previous waiver through the Clean Air Act to Alabama, Georgia, Kentucky, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, Texas, Louisiana and Florida, as well as the District of Columbia.

The Renewable Fuels Association on Monday asked EPA to expand the waiver issued last weekend to allow for the temporary use of E15 nationwide to help alleviate potential fuel shortages resulting from Harvey.

"It appears that today's multi-state waiver letter from EPA effectively allows for an early end to the summer volatility control season and allows immediate use of winter gasoline in conventional gasoline areas," RFA President and CEO Bob Dinneen said in a statement to DTN.

"This allows for the sale of E15 in those conventional gasoline areas of the states covered by the waiver and is effectively what we asked of the agency on Monday. Retailers must still meet or be deemed compliant with other regulatory requirements associated with selling E15, such as the misfueling mitigation plan. But consumers facing likely gasoline supply issues as a result of Hurricane Harvey are one important step closer today to a high-octane, low-cost alternative."

In a letter to EPA Administrator Scott Pruitt on Monday, the RFA asked the agency to relax the Reid vapor pressure, or RVP, limits to 10 pounds per square inch for all finished gasoline blended with ethanol in conventional and reformulated gasoline areas nationwide through Sept. 15.

In response to the hurricane, EPA on Aug. 26 issued a waiver of certain reformulated gasoline and RVP requirements. Those requirements are in place to help reduce ozone pollution.

On Wednesday, Pruitt approved an expansion of the waiver, saying in a letter to the states that there are concerns about fuel shortages.

"The shutdown of nearly a dozen refineries and extreme weather prohibiting fuel barge movement in the Gulf area, with several other refineries operating at reduced capacity has continued to limit the production and availability of fuel to areas both within and outside of the Gulf area," Pruitt wrote.

"In addition, the Colonial pipeline, which has been disrupted due to storm damage, is operating at a reduced capacity. The designated states and D.C. receive a significant percentage of their gasoline supplies from the Gulf-area refineries and through the Colonial pipeline."

As a result, Pruitt said, the disruptions are "creating a shortage of compliant fuel."

In relaxing RVP requirements, gasoline blenders are allowed to produce fuel that complies with EPA regulations using any available gasoline blendstock on the market, including E15.

The U.S. ethanol industry has been pushing EPA to issue a waiver on E15 for some time, holding out hope the agency would be able to take action that would allow for year-round sales.

Federal law forbids the sale of E15 from June 1 to Sept. 15.

Currently, E15 sales are restricted in nearly two-thirds of the country during the summer months because of ozone concerns. The EPA waiver issued on Aug. 26, allowed gasoline with less than 9% ethanol by volume to qualify for special provisions for alcohol blends requirement. That waiver, however, did not allow for blends up to E15.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

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