E15 hits bump in Iowa

MARION -- The desire of some Iowa fuel retailers to become the nation's first sellers of E15 gas to mainstream vehicles has run into an obstacle.

The Environmental Protection Agency last week approved the final step needed for some companies to begin selling E15. After a regulatory process that has covered three years, it approved plans for proper labeling and other conditions to prevent "misfueling" of vehicles with E15.

The Linn Co-op Oil Co. of Marion will detail its plans to offer the 15 percent ethanol blend to 2001 and later model vehicles at an event on Monday, but also explain why it hasn't yet been possible to do that.

Retailers can't buy the gasoline formulations needed to blend E15 in compliance with federal regulations during the summer months at pipeline terminals in Iowa because the oil refiners aren't delivering it, according to Monte Shaw, executive director of the Iowa Renewable Fuels Association.

Federal regulations dictate the volatility of gasoline, or characteristics that influence evaportation. Shaw said the type of ethanol already sold for mainstream vehicles, E10, is granted a one-pound waiver of the federal requirement that the blended product have a Reid Vapor Pressure of 9 pounds or less per square inch.

Shaw said the waiver does not extend to E15, so the gasoline must be blended using the kind of low-Reid Vapor Pressure gasoline formulations ordinarily required only in large cities such as Chicago or Kansas City that have been designated as ozone nonattainment areas.

Oil refiners haven't been shipping those formulations to Iowa, Shaw said, despite entreaties from retailers.

"They are dictating to us our fuel choices at Linn Co-op Oil Co. in Marion, Iowa," Shaw said.

Linn Co-op officials will discuss their strategy for bringing E15 to market at a press conference Monday.

Shaw said motorists could buy E15 for 5 to 10 cents less per gallon if E15 were available. Currently, it is available only to flex-fuel vehicles at retailers with blender pumps at a small number of locations in Iowa.

If the owners of all 2001 and newer vehicles that could use E15 were able to buy it in Iowa and did, some $50 million to $100 million per year would stay in the pocketbooks of the state's consumers, Shaw said.

To date, Shaw said, no gasoline retailers have been able to offer E15 except at the blender pumps for flex-fuel vehicles.

Shaw said the oil industry has tried to use lawsuits, state legislation and misinformation regarding engine performance on E15 to keep it out of the market.

"They've made it extremely difficult to compete with petroleum products," Shaw said.

The American Petroleum Institute did not immediately respond to questions submitted about the issue.

Ethanol is blended at terminals known as "racks" next to interstate oil pipelines, such as the Magellan pipeline that passes through the Iowa City-Coralville area.

Shaw said the renewable fuels industry does not blame the problem on the pipeline companies, which can only ship the product that is provided to them by the oil refiners for delivery.