OPIS Headlines – November 19, 2010

U.S. EPA has confirmed that there will be at least a one-month delay by when it will receive all the test data on the second set of vehicles running on higher ethanol blends up to 15%, meaning there will also be a delay on when the agency will issue its second E15-related decision.

“DOE has informed EPA that lab testing of E15 in model year 2001-2006 vehicles will now be completed by the end of December. EPA will make its decision shortly after receiving that data,” according to a brief EPA statement sent to OPIS.

No further information was provided, however the delay, according to a source familiar with the issue, appears to be because one of the vehicle models that DOE is testing did not pass any of the fuel blend tests, including operating on E0. The agencies believe that vehicle model was not property maintained and so they are going to conduct a retest on a different vehicle, the source explained.

Last month, EPA approved the use of up to E15 in 2007 and later vehicles, and said it expected to rule on the second set of vehicles — 2001-2006 model years — by the end of the year. The testing for those vehicles, being conducted by DOE, was slated to have been completed by the end of this month, but EPA’s statement indicates that timeframe has slipped, and will instead be completed by the end of the year. Therefore, an EPA decision on whether to allow for higher ethanol blends in the second set of model years should be completed in the early part of next year.

Ethanol groups said while they were disappointed with the delay, proper testing should be the utmost priority. “We’ve been informed by EPA that the decision is being delayed because of the need to retest one particular car that hadn’t been properly maintained and serviced,” explained Tom Buis, CEO of Growth Energy, which was the lead group to file the E15 waiver last year. “That particular car failed on all fuels, including E0,” he explained, echoing what a source familiar with the issue previously told OPIS. “The problem was with the testing process, not the fuel. This also demonstrates just how committed EPA is to the integrity of the testing; they are doing this right. We are confident that ultimately all the tests will show what we’ve said all along, that E15 is a great fuel for American motorists,” he added.

Similar comment came from Renewable Fuels Association President and CEO Bob Dinneen. “We are encouraged by EPA’s commitment to accurate testing for 2001- 2006 cars and pickup trucks, particularly given the failures are unrelated to the fuel being tested. While the delay is disappointing, it is understandable. We encourage EPA to extend such due diligence to testing for all cars and pickups, regardless of age. We believe the fuel testing to date clearly demonstrates the efficacy of E15 as a motor fuel for all light duty vehicles,” he added.

Meanwhile, the American Petroleum Institute (API) spokeswoman Cathy Landry said that, assuming the EPA statement is accurate, her group “welcomes the delay. As we have suggested previously, EPA should extend its review six months or more to allow scientific testing on the effects of E15 on the engines of these older vehicles to be completed. Approving use of E15 without adequate and complete testing puts American consumers at risk. Early indications from results of testing have revealed potential safety and performance problems that could affect consumers and the investments they’ve made in their automobiles,” she added.

While API supports “a realistic and workable renewable fuels standard and the responsible introduction of increased biofuels,” the trade group believes that “rushing to allow more ethanol before we know it is safe could be disastrous for consumers and could jeopardize the future of renewable fuels,” Landry added.Similar comments were heard earlier this week in Chicago, where EPA held a public hearing on its E15 pump labeling proposal.