A Setback For The Ethanol Industry

This Friday, May 20, 2021 photo shows a fuel truck driver checking the gasoline level at a United... [+] Oil station on Sunset Blvd. in Los Angeles. Over the past two weeks, the average U.S. gasoline price rose 8 cents to $3.10 per gallon. Trilby Lundberg, an industry analyst from the Lundberg Survey, stated Sunday, May 23 that the price of regular-grade gasoline rose 8 cents to $3.10 per gallon due to disruption in supply following the cyberattack on the Colonial Pipeline. Also, the rise in prices of corn, which is a key ingredient of corn-based Ethanol that must be blended into gasoline, was a factor. (AP Photo/Damian Dovarganes). ASSOCIATED PRESSThe U.S. Court of Appeals, District of Columbia Circuit struck a blow to the ethanol industry last week. A rule change by the Environmental Protection Agency (EPA), which allowed the sale of a 15% ethanol gasoline mix (E15) during the summer months, was found to be in violation of federal law. E15 sales were restricted year-round due to the possibility of forming smog from evaporative emission.Today, I'd like to go over the reasons why the original rules were created.Gasoline Blending 101The U.S. gasoline specifications change every year. The Reid vapor pressure (RVP) is a requirement for gasoline. This requirement is important in the ethanol blending discussion. A high vapor pressure in gasoline can cause it to evaporate too fast and lead to smog formation. The blending of gasoline components contributes to the overall vapor pressure. This is a reflection of their concentration.Consider two gasoline blending components A and B, with RVPs of 10, 20 and 20 pounds per square inches (psi, respectively). A gasoline blend containing 90% A and 10% of B would have a vapor contribution of 9 psi (0.9*10 and 20 psi respectively) for an approximate 11 psi blended vapor pressure.Because of the differences in how these components interact, I use "approximately". Because of its non-ideal behavior with gasoline blends, ethanol was introduced to the gasoline supply.Ethanol is not idealPure ethanol has a RVP of 2. Mixing 90% A from the above example with 10% ethanol would give you a mixture of 9.2 PSI. However, ethanol in gasoline can actually increase the mix's total volatility by about 50% for ethanol blends less than half.This is because ethanol is a polar molecular, while many other gasoline components are not. These two types are not compatible with each other, so they don't mix as well as nonpolar molecules or polar components. This causes volatility to increase.In the end, the RVP will increase by approximately 1 psi when ethanol is added to gasoline in a 10% mixture. Instead of the 9.2 psi RVP expected from the mixture, 10 psi gasoline will be mixed with ethanol to produce a mixed RVP value of 11psi. The ethanol has behaved effectively as the 20-psi blending part B in the previous example, with its RVP of 2 psi.This meant that ethanol mixtures would be more difficult to meet the RVP specifications. Therefore, in 1992 the EPA enacted a 1 psi waiver on ethanol blends up to 10%.Smog and EthanolIronically, this meant that ethanol, which was intended to be cleaner than gasoline, would lead to higher evaporation emissions and thus to more smog formation. However, ethanol blends can reduce tailpipe emissions which helps offset higher evaporation emissions.The EPA was concerned about the possibility of higher smog levels and opposed to allowing nationwide sales year-round of 15% ethanol blends (E15). Because it would double their market potential in the United States, the ethanol industry wanted E15 to be available to consumers all year.The Court RulingThe 2019 rule amendment provided an exemption from E15 sales during the summer. Some expressed concern that this was only the first step towards an E15 mandate. The current biofuel mandate is stuck at 10% ethanol in gasoline.This could explain why the American Fuel and Petrochemical Manufacturers sued the EPA for the 2019 rule change.Chet Thompson, President of AFPM, stated in a statement that there is no ambiguity or in the statute. However, the previous administration's reinterpretation of the statute overtook the will of Congress.The National Corn Growers Association, Growth Energy and the Renewable Fuels Association were all pro-biofuel groups. They issued a joint statement in protest at the court's decision.We are disappointed that the courts rejected EPA's request to extend the RVP waiver in order to include E15. This decision could result in American drivers not being able to pump less carbon and more carbon entering the atmosphere. We will continue to pursue all options and work with our congressional champions to find a solution before the 2022 driving season.