E15 – gasoline containing 15 percent ethanol that has EPA approval  – is one of those ideas that looks good on paper but seems headed for problems in the real world. API’s Bob Greco, director for downstream and industry operations, outlined some of them for reporters during a conference call:

• Testing so far shows the higher concentration of ethanol would not be fully compatible with much of the dispensing and storage equipment the nation’s gas stations. A recent API review estimated half of the existing retail outlet equipment isn’t E15 compatible.
• As a result, there could be damage to equipment, safety problems and potential environmental concerns at gas stations.
• Difficulties with E15 getting into the market could erode public support for the nation’s renewable fuels program.
• Refiners could face problems in the future, caught between satisfying federal requirements for blended fuels and the lack of a retail market for those fuels.

Greco said EPA’s E15 approval isn’t a mandate to sell and that the timing of its emergence into the marketplace will depend on clearing hurdles in individual states. Still, the concern is that E15 wasn’t thoroughly evaluated before it got EPA approval.

“The availability of biofuels for blending in gasoline is a good thing because of its favorable octane, and the industry supports a realistic and workable Renewable Fuels Standard.  In fact, more than 90 percent of all gasoline sold in the country has a 10 percent blend of ethanol.  But EPA has not done its homework before introducing E15 to America.  The Agency’s enthusiasm for E15 has clouded its judgment and led to approval of a fuel before adequate study has been done.”

Compatibility issues loom large, Greco said. “Even with vehicles the EPA says are compatible, automakers disagree,” he said. Last summer U.S. Rep. James Sensenbrenner of Wisconsin forwarded letters from car companies to EPA Administrator Lisa Jackson that outline their E15 concerns. A sampling:

Ford: “Ford does not support the introduction of E15 into the marketplace for the legacy fleet. … Fuel not approved in the owner’s manual is considered misfueling and any damage resulting from misfueling is not covered by the warranty.”

Chrysler: “We are not confident that our vehicles will not be damaged from the use of E15. … The warranty information provided to our customers specifically notes that use of the blends beyond E10 will void the warranty.”

Honda: “Vehicle engines were not designed or built to accommodate the higher concentrations of ethanol.  … There appears to be the potential for engine failure.”

Ultimately, Greco said, consumers might become confused and ultimately could bear higher costs:

“Without a market for the higher ethanol blends, Congress’ biofuels mandate could result in higher compliance costs or production constraints that could place upward pressure on gasoline prices for consumers.”

One questioner asked whether NASCAR’s use of higher-ethanol fuel suggests E15 concerns are overstated. “I don’t know about you,” Greco said, “but I don’t drive a race car.”