The ethanol industry pressed the Environmental Protection Agency on Monday to relax fuel restrictions nationwide to blend more of the corn-based fuel in the gasoline supply to reduce the threat of price spikes in the wake of Hurricane Harvey.
“The action we are requesting would significantly enhance flexibility for blenders and refiners and help alleviate the logistical challenges and shortfalls that are causing gas prices to spike,” the Renewable Fuels Association, the industry’s leading trade group, said in a letter to EPA Administrator Scott Pruitt.
The EPA has relaxed a number of national emission and Clean Air Act requirements for Texas to make it easier for fuel suppliers to transport and blend gasoline and diesel fuel without the fear of violating federal environmental and emission standards.
The ethanol industry wants the agency to also relax the Reid Vapor Pressure, a measure of fuel volatility, for fuel to 10 pounds per square inch, to allow a wider variety of available gasoline stocks to be used to blend 10 percent and 15 percent ethanol blends. And it wants it done, not just for Texas, but nationwide, according to the letter.
“Relaxing RVP requirements to 10.0 psi nationwide would immediately allow gasoline blenders to produce fuel that complies with EPA regulations using any available gasoline blendstock on the market,” the letter said.
“It would also immediately allow blenders to use up to 15 percent ethanol by volume in all finished gasoline in all areas of the country, proving a badly needed source of additional supply and helping to offset gasoline shortfalls resulting from refinery and terminal outages,” the industry group continued.
The group has been pushing Congress to waive RVP requirements for E15 ethanol blends, allowing the fuel to be blended year-round. The blend is not currently allowed to be used in the gasoline supply during the summer because of its higher volatility level. Ten percent ethanol blends receive a waiver to comply with fuel blending rules. The group wants E15 to be treated the same.
“While the waiver issued August 26, 2017, allows gasoline with less than 9 percent ethanol by volume to qualify for the ‘special provisions for alcohol blends’ requirement, it did not allow blends containing up to 15 percent to qualify for the provision,” the letter read.
“Extending this temporary waiver to 15 percent ethanol blends would greatly assist in alleviating current price spikes and supply crunches,” the letter added. The ethanol industry prides itself on its low cost as compared with other fuel additives derived from fossil fuels as well as gasoline itself.
“EPA has taken similar actions in the past to provide immediate relief to gasoline markets in the wake of natural disasters,” the letter read. “We urge the agency to act immediately on this request to help alleviate the economic impacts of Hurricane Harvey on American consumers.”
Ethanol futures on the Chicago Board of Trade rose slightly Monday to $1.51 per gallon after sliding dramatically in August. Gasoline blend stock on the New York Mercantile Exchange hovered around $1.71 per gallon.
Meanwhile, crude oil future contracts for October delivery fell more than $1 to land at $46.57 per barrel, while September natural gas futures rose 3 cents to $2.93 per 1 million British thermal units, according the NYMEX.
