An E0 Demand Surge?

API analysis points to doubling interest in ethanol-free gas

Stewart's Shops ethanol E85 alternative fuels (CSP Daily News / Convenience Stores / Gas Stations)

WASHINGTON -- As the U.S. Environmental Protection Agency (EPA) is poised within the next week to release its proposed renewable fuel blending volume targets for the Renewable Fuel Standard (RFS), one oil industry group is highlighting the growth potential for gasoline completely free of the most popular renewable fuel—ethanol.

The America Petroleum Institute (API) crunched data from the federal Energy Information Administration (EIA) showing that demand for ethanol-free gasoline, or E0, rose from 3.4% of gasoline demand in 2012 to nearly 7% in 2014.

“Demand for E0 is strong and growing, and EPA must take this into account as it prepares to release biofuel mandates for 2014, 2015 and 2016,” said API’s downstream group director, Bob Greco, in a conference call last week with the National Marine Manufacturers Association (NMMA). “Consumers want E0 for their boats, for lawn equipment, for recreational vehicles and for classic cars.”

Greco contrasted the growth in demand for E0 with that of E85, an 85% ethanol blend that according to API’s analysis has 0.15% share of total gasoline demand and has remained flat over recent years. This is despite the fact that there are more than 17.4 million flex-fuel vehicles (FFVs) on the road that can run on E85. According to U.S. Department of Energy figures, there are more than 2,800 stations offering E85 in the United States.

An accurate count of stations selling E0 is harder to come by, although ethanol-free-gas advocacy site counts more than 9,300 in the United States and Canada. 

(As an example, Stewart’s Shops, Saratoga Springs, N.Y., touts its ethanol-free premium-grade gasoline on its website.)

“EPA should not try to mandate a market for fuels like E85 for which there is no demand while trying to eliminate fuels like E0 for which actual consumers have shown a substantial demand,” said Greco.

Nicole Vasilaros, vice president of federal and legal affairs for NMMA, added that many boaters use E0, and highlighted her group’s concerns about the growing availability of higher ethanol blends such as E15, a 15% ethanol blend that is approved for use in vehicle models 2001 and newer, but not marine and other small engines. Several large retail chains have begun or recently announced plans to sell E15, including Murphy USA, Kum & Go and Sheetz.

“E0 is not guaranteed to remain available as a result of the RFS and the influx of higher ethanol blends,” Vasilaros said. “An inability to find E0 or a simple misfueling mistake could cause boaters to see engine stalling, corrosion leading to oil or fuel leaks, increased emissions and damaged valves, rubber fuel lines and gaskets.”

The EPA has promised to meet a June 1 deadline on releasing its proposals for how much ethanol, biodiesel and cellulosic biofuels needs to be blended into motor fuel under the RFS for 2014, 2015 and 2016.

In a response, Geoff Cooper, senior vice president of the Renewable Fuels Association (RFA), the trade association for the ethanol industry, countered that API’s analysis of E0 demand was inaccurate and misleading. According to Cooper, API appears to have included gasoline exports in its “total gasoline supplied” figure. Because exported gasoline does not usually contain ethanol, the API analysis makes it appear as if more E0 is being delivered to the U.S. market than actually is, he said.

Ethanol blending, meanwhile, hit a record 13.32 billion gallons in 2014, Cooper said, citing EIA data, and it has set a record for the week ending May 15.

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