EMA Sends Letter To Congressional Leadership On E15
Last week, the Energy Marketers of America sent a letter to Congressional leadership regarding the “Consumer and Fuel Retailer Choice Act of 2022,” (S. 5145) that would allow E15 to be sold throughout the year.
The legislation was endorsed by the American Petroleum Institute, NACS, NATSO, SIGMA and several agriculture associations including Growth Energy and the Renewable Fuels Association.
In the letter, EMA said that it is willing to support the legislation provided Congress appropriates sufficient funding for UST system compatibility upgrades made available to small business fuel marketers.
Specifically, the grant program should include an “80-20” cost share (similar to the current federal EV infrastructure cost sharing formula), with the federal government covering 80 percent of the capital expenditures associated with UST system upgrades to entice small businesses to make necessary upgrades.
UST system retrofits or replacement can cost more than $100,000 per site in capital expenditures which are far beyond the ability of small business fuel retailers with multiple sites to pay.
The EPA confirmed in an E15 UST system compatibility guidance document in January 2020 that said, “most older and even some newer existing UST systems (which includes but is not limited to tanks, pumps, ancillary equipment, lines, gaskets, and sealants) are not fully compatible with E15 and require modification before storing E15.”
Unfortunately, the current 50/50 cost sharing formula for the U.S. Department of Agriculture’s (USDA) Higher Blend Infrastructure Incentive Program (HBIIP) does not provide a strong enough incentive for small business energy marketers to make compatibility upgrades.
Under the HBIIP program, many energy marketers would be saddled with capital investment expenditures for higher ethanol blend compatibility upgrades that far exceed their ability to pay.
An 80/20 cost sharing formula would level the playing field across all federal alternative fueling infrastructure programs and provide energy marketers with strong and realistic incentives to upgrade their UST systems for higher ethanol blends.
Meanwhile, a U.S. House companion was also introduced by Reps. Angie Craig (D-MN) and Adrian Smith (R-NE) which has 21 co-sponsors.
Another 250 groups and companies sent a letter to congressional leaders supporting the bill.
While there is no guarantee Congress can pass the E15 bill legislatively before the end of the year, EMA urges Congress to appropriate sufficient funding so that small businesses can participate in the E15 market.
Finally, the Biden Administration is reviewing a petition by a group of Midwest governors to permit the year-round sale of E15 in their states.
The petition is authorized under a provision in the federal Clean Air Act allowing an exclusion from the 1 psi waiver for E10 upon notification by a governor that the higher RVP limit will increase air emissions in that state.
The Clean Air Act then requires the EPA to grant the petition and promulgate regulations to revert to a 9 psi RVP for that area no later than 90 days after the date of receipt of the notification.
However, if the EPA determines the request would result in a shortage of gasoline in the petitioning state, implementation may be delayed up to two years. No such determination has been made yet by the administration.
EMA believes the approval of an exclusion from the 1 psi waiver would require the creation of a boutique fuel exclusive to the petitioning states, thus limiting gasoline supply to the region.