Adam Gustafson: Taking Down the Barriers to Ethanol Blending

10.03.17 | Podcast | By:

Recently, I spoke with Adam Gustafson who represents the Urban Air Initiative (UAI) and is also a partner at Boyden Gray & Associates. UAI, as Adam noted, “exists to remove regulatory barriers to improving fuel quality for the purpose of cleaning the air and improving human health. And Urban Air Initiative believes that the best way to do that is by reducing the harmful components of fuel by increasing the ethanol portion of the gasoline.” We talked about EPA’s REGS rule, its modeling of vehicle emissions, the Coordinating Research Council (CRC’s) recent emissions studies and how they impact ethanol, the new Administration and what that means for ethanol, and other topics. You can listen or download the podcast below or listen to it in ITunes.

On UAI’s Comments to EPA’s REGS Rule:

“It may be what the agency intended [to increase ethanol blending] but unfortunately, the proposal that EPA issued would actually substantially limit ethanol use in motor vehicle fuel. It does that by a misinterpretation of something called the ‘Sub-Sim’ law. This is a piece of the Clean Air Act, section 211f that EPA has traditionally interpreted to limit the ethanol content of fuel. The Sub-Sim law simply says, and I should quote from the statute because it is important, ‘that it is unlawful to first introduce into commerce, or to increase the concentration and use of any fuel, or fuel additive, for use by any person in motor vehicles, which is not substantially similar to any fuel or fuel additive utilized in the certification of new motor vehicles.’

 

So, when an auto manufacturer produces a new vehicle, they have to demonstrate to EPA that it is going to comply with EPA’s emissions standards, and to do that, they run the vehicle on a dynamometer, measuring the outputs from the tailpipe and using a test fuel with specifically set parameters. EPA has interpreted the Sub-Sim law to mean that the fuel used in the market cannot have a higher ethanol concentration than the fuel used in certification testing without a waiver of the Sub-Sim law. The problem with EPA’s interpretation is that that is not what the law says at all. The law only limits the use of fuels or fuel additives that are not substantially similar to fuels or fuel additives used in certification. And as of this year, 2017, the gasoline certification test fuel contains 10 percent ethanol.

 

After the Tier 3 rule, which introduced this E10 gasoline certification fuel, ethanol is clearly a fuel additive used in certification. And so, we argue in our comments that because ethanol is a fuel additive used in certification, EPA cannot control the concentration of ethanol in market fuel through the Sub-Sim law. Instead, if EPA wants to control the ethanol concentration of gasoline, it has to do so through its ordinary authority to control gasoline components, and that is in a different provision of the Clean Air Act, section 211c. And these two provisions of the law are different in an important way. Ordinarily when EPA wants to impose a limit on a market fuel, it has to find one of two things: either that the fuel or fuel additive that is controlling is bad for human health or that it impairs emissions control devices.

 

That is very different from the Sub-Sim law. If a fuel manufacturer wants to sell a fuel that is not substantially similar to one used in certification testing, the manufacturer has to show EPA that the fuel will not result in any impairment of emissions control devices. So, by relying on the Sub-Sim law to do the work that should be done under a different provision of law, EPA is basically shifting its burden to the fuel manufacturer, who now has to get a waiver of the Sub-Sim law by showing that the fuel will not impair emissions control devices, essentially proving a negative. We filed comments explaining that EPA’s interpretation of this law is inconsistent with the plain meaning of the statute, and improperly shifts EPA’s legal burden to fuel manufacturers. Those comments were filed in February I believe, and EPA has not yet taken any action to finalize the rule, and we do not know if EPA will do so. It is possible that since this rule was issued under the prior administration, the current EPA may decide not to finalize the rule as proposed and withdraw or substantially revise it.”

On EPA’s Lifecycle Analyses of Ethanol:

“On the issue of lifecycle analysis, EPA is woefully behind in keeping up with the science. EPA continues to rely on a 2010 analysis of ethanol’s lifecycle carbon intensity.  This is a measure of all of the carbon emissions of the fuel starting with agriculture to actually combusting the fuel in the vehicle. Back in 2010, when EPA did its first RFS [Renewable Fuels Standard] rule, EPA estimated that corn ethanol was 21 percent less carbon intensive than petroleum than ordinary gasoline. That was the best estimate EPA could come up with then, but it has proven to be entirely false because it was based on assumptions that have proven to be inaccurate. Back in 2010, there were gross overestimations of the land use change that would result from increasing corn ethanol production. We know, empirically, that those estimates have not come to pass.

 

Corn ethanol has increased in volume primarily by increasing in intensity of agriculture through double cropping and increasing yield. And, the EPA’s 2010 analysis also failed to account for the soil carbon sequestration of corn ethanol, we know now that the corn plant takes carbon out of the atmosphere and buries it much deeper in the soil than had previously been measured. So, while EPA relies on an old model, the Department of Agriculture [USDA] and the Department of Energy have both invested in updated modeling of carbon intensity. USDA just came out with an estimate of corn ethanol as currently being 43 percent less carbon intensive than gasoline, with estimates that that number will continue to increase. We think that EPA should either improve its own analysis, based on the best available science, or simply adopt one of these other models, like the GREET model that the Department of Energy is continually updating.”