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EPA gets earful at RFS public hearing

Retailers testify at EPA RFS hearing of lack of education, while others say infrastructure available to increase biofuels adoption.

For over 12 hours Thursday, the Environmental Protection Agency held a public hearing that offered a platform for interested parties to present data, views and arguments on the proposal to lower the mandated volume obligations under the Renewable Fuels Standards for 2014.

Nearly 150 people testified to a panel of EPA staff tasked with finalizing the rule. EPA staff were able to ask questions of panelists, commonly asking for more detailed analysis in written comments of the claims made by those who testified.

At the center of the discussion was whether to set policy that incentives future adoption and use, or set levels more pragmatically in line with current infrastructure and demand projections.

Grant Menke, policy director at the Iowa Renewable Fuels Assn., testified that Iowa has over 200 retailers that offer consumers higher ethanol blends up to E85, including more than a dozen retailers that offer E15 as a registered fuel.

"The fact is that everywhere higher blends have been offered, consumers have responded positively. Recent sales data found the average ethanol content for Iowa blender pump operators was around 25%," he said.

Growth Energy’s director of regulatory affairs, Chris Bliley, testified that while some have claimed that the infrastructure is not in place to dispense ethanol blends above 10% that is simply not the case.

"The vast majority of gasoline dispensing equipment made since 2008 is warranted for ethanol blends as high as E15 and underground storage tanks made in the last 20 years are equipped to handle blends up to 100% ethanol," he testified. And today 80% of the vehicles are approved for E15, and there are over 16 million flex-fuel vehicles that can consume higher blends up to E85.

But testimony from those at the retail level shared that the biggest challenge is consumer awareness of these blends and "information that E15 and E85 is bad," shared Paige Anderson, director of government relations at the National Assn. of Convenience Stores representing 149,000 convenience store operators.

"The majority of our stores are not seeing the demand that we're hoping they would see with higher blends of ethanol," Anderson said.

Tim Columbus, counsel for SIGMA, a trade association of 270 independent motor fuel marketers and chain retailers, said his organization has been supportive of the RFS and opposed a repeal. He welcomed EPA's latest move though as he said the waiver was important to avoid a "severe shock to the fuels market" as the "blend wall is a real threat."

He noted his client members do not see huge increases in sales of higher ethanol blends, with most E85 sales representing just 1.5-2% of sales at the retail level. He added there remains regulatory problems perceived with E15 and E85 that that EPA needs to address that through education.

At the end of the day though, "nobody who is a consumer has to buy a drop of this," he said. "We can build all the infrastructure we want, but if they don't use any great volumes it leaves marketers out of compliance."

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