More Ethanol in Gasoline? Automakers say it will "Damage" Cars

(MoneyWatch)  Some 54 ethanol producers, grouped together under Growth Energy's banner, are carrying the torch for dramatically increasing the amount of ethanol in pump gasoline from 10 to 15 percent. Will they succeed? There are technical and political arguments to be made on both sides, but for now the momentum seems to be against fast-tracking higher ethanol blends.

Growth Energy, whose producers would obviously benefit from huge new orders, argues that science "overwhelmingly supports" the rapid introduction of what it calls E15 through an Environmental Protection Agency (EPA) waiver process. It maintains that ramping up ethanol production would create green-collar jobs. It also claims that using E15 instead of E10, the U.S. would avoid importing seven billion gallons of gasoline per year. And it cites a University of Nebraska-Lincoln study that asserts corn ethanol can reduce greenhouse gas emissions 59 percent compared to gasoline.

But there is stiff resistance to this plan, and the carmakers are in the forefront. Charles Territo, a spokesman for the Alliance of Automobile Manufacturers, says the 11 Alliance members are "very concerned" that what it called "mid-level blends" could "severely damage millions of vehicles on the road designed only to operate on blends of up to 10 percent ethanol. We believe additional testing is necessary before a decision is made by the EPA." Even adding small amounts of ethanol to the blend, he said, "could do exponential damage to a majority of vehicles on the road."

Growth Energy CEO Tom Buis takes strong exception, of course. "Multiple studies by government agencies and academic institutions, conducted on more than 100 vehicles, 85 engine types and 33 fuel-dispensing units using blends from E15 up to E85 all point to the same thing: E15 has no adverse impact on an engine's performance, maintenance or emissions. Automakers who claim that E15 will damage their vehicles should produce their scientific studies to prove that contention."

The federal Renewable Fuel Standard (RFS) for biofuels (now in a public comment period) is a driver here, because it will require nine billion gallons of ethanol and other biofuels to be blended into gasoline next year, and up to 36 billion gallons by 2022.

But the New York State Department of Environmental Conservation, which strongly opposes E15 and made comments to the EPA July 8, derides as "incorrect" the notion that RFS will require higher ethanol blends. The mandates "do not require any ethanol in gasoline," says New York's David Shaw. "They require specified quantities of renewable transportation fuel. Ethanol is waived for up to 10 volume percent in gasoline."

Shaw also writes that higher ethanol blends have interfered with on-board diagnostic systems in some cars. The failure of those systems "is, by itself, sufficient to justify denial of the waiver request," Shaw said.

Meanwhile, the EPA's Margo Oge, director of the Office of Transportation and Air Quality, told a Senate panel in March that the agency is working on testing higher ethanol blends and will likely have a report "over the course of the next year."