A contentious U.S. EPA decision allowing higher blends of ethanol into gasoline is unlikely to spur immediate changes at corner gas stations, industry officials said yesterday.

EPA approved the use of 15 percent ethanol in newer model vehicles yesterday, drawing fire from unlikely bedfellows, including some environmental groups and the auto industry, which called the decision "premature." Meanwhile, ethanol advocates said the approval did not go far enough.

But despite the crossfire on this issue, it appears the decision may not fuel much change in the ethanol market.

While ethanol group Growth Energy had sought approval for 15 percent ethanol, or E15, to be blended with gasoline -- up from the current 10 percent cap -- EPA yesterday only granted a waiver for E15 use in cars and trucks built since 2007. Older cars, heavy-duty trucks, motorcycles and other sources like motorboats were left out of the mix.

The agency still plans to issue a separate decision on cars and light-duty trucks from model year 2001 through 2006 next month after it receives more testing results from the Energy Department, but older models will remain unapproved because the agency does not have enough data, EPA Assistant Administrator Gina McCarthy told reporters yesterday.

Vehicles that have the green light to run on E15 account for about one-third of the nation's fuel demand, McCarthy said.

But there is no guarantee that the market will be tapped: Retailers are not required to supply the blend, and there are a host of regulatory and market hurdles that may stand in the way.

Ethanol industry sees little expansion of market
Effectively, the new EPA decision will do little to "move the needle and expand ethanol use today," Renewable Fuels Association President Bob Dinneen said in a statement.

Potential confusion at the pump about which sources can use the E15 blend and which may not will be on the minds of retailers weighing whether or not to provide the higher blend, said Jeff Lenard, a spokesman for the National Association of Convenience Stores. Those stores sell about 80 percent of the nation's gasoline, he said.

If older vehicles fuel up with E15, it could potentially corrode their engines -- and pump owners may be held responsible for that misfueling, Lenard said.

That consideration may be what drives decisionmaking on whether or not to sell E15 at a local convenience store, said Lenard. "The short answer," he said, "is the market is fairly limited because you need to look at the potential concerns of that liability."

Moreover, when the actual market for the vehicles currently is so small, store owners will be asking themselves: "Is it worth replacing an underground storage tank?" he said.

Even if the 2001 through 2006 cars are approved for using the E15 blend -- which could mean more than half of the cars on the road could be able to use the fuel -- there is still the possibility of misfueling on older vehicles or smaller engines, he said.

EPA hopes to address liability worries of retailers
To help allay misfueling concerns, EPA is proposing new label requirements that would be slapped on pumps to warn consumers about which vehicles are eligible to use the ethanol blend, but industry groups fear that the warning will largely go ignored or may still be unclear.

Growth Energy, which first sought permission for the higher blends, played down misfueling concerns on a call with reporters yesterday.

"This is not the first fueling change our country has gone through," said Growth Energy CEO Tom Buis. The nation moved from leaded to unleaded fuel, and is able to manage with two different types of diesel on the market used by different vehicle model years. "I'm confident we can make this change, as well," he said.

"EPA is not requiring the use of E15," McCarthy said. After the agency reviewed DOE's testing on the emissions and engine durability of the E15 blends on the new vehicles, the agency wanted to issue a decision as soon as possible, she said. "The law requires us to respond fairly expeditiously," she said.

"This decision is about allowing gasoline blended with ethanol by the appropriate vehicles to be used where and when E15 becomes available," she said.

A 'flood' that looks more like a trickle
Ethanol groups say that many states will still have to pass regulatory changes and review public health information before tapping the fuel. Still, Growth Energy believes that E15 may start trickling into the market as soon as February. That movement, however, depends entirely on decisions at the state, local and retail levels.

American Petroleum Institute spokesman Prentiss Searles said that he worries not enough testing had been done to approve the E15 blend at all. "EPA really doesn't have any reason to make the decision today. They could make it in July of next year and have a lot more research done," he said, referencing studies that are currently being conducted by API and auto manufacturers to gauge the impacts of the blend. "What EPA's decision has done is opened a floodgate you really can't shut," he said.

"The EPA's decision is premature and irresponsible," said Kate McMahon, biofuels campaign coordinator at Friends of the Earth. "The agency has yet to conclude comprehensive scientific testing on the long-term engine safety and pollution impacts of increased ethanol in gasoline -- period," she said in a statement.

While the EPA decision would only allow for 5 percent more ethanol than the E10 version, it amounts to a 50 percent increase in renewable fuels.

That boost is crucial for helping the nation reach its renewable fuel goals, ethanol advocates say. Congress has mandated that refiners produce 36 billion gallons of alternative fuel by 2022, and 15 billion gallons of that requirement will be met with ethanol.

"I will say indeed this decision was a step in the direction of allowing more renewable fuels into the market," McCarthy said. "It is by no means an assurance that it will happen quickly, and frankly, that's not what EPA's job is."

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500