API: Margin of safety is necessary in final ethanol mandate

WASHINGTON, April 30, 2014 – In a letter released today, API asked EPA to build in an adequate margin of safety when setting the final ethanol mandates for 2014 because projections of gasoline demand often miss the mark:

“Given the uncertainties in gasoline demand projections, a 9.7 percent ethanol mandate represents the minimum buffer needed to protect consumers against economic harm and safety concerns associated with the ethanol blend wall,” API Downstream Group Director Bob Greco told reporters in a conference call this afternoon.

Greco said the overwhelming majority of vehicles and refueling infrastructure have not been certified or warranted for ethanol blends above 10 percent, and that Coordinating Research Council testing (here and here) shows that ethanol concentrations in gasoline that exceed 10 percent can lead to engine and fuel system damage. He asked for an ethanol mandate of no more than 9.7 percent in order to preserve consumer choice for ethanol free gasoline, which represents about 3 percent of the market.

“EPA shouldn’t try to micromanage ethanol mandates based on slight changes in gasoline demand forecasts,” Greco said. “These mandates set the minimum amount of ethanol that must be used each year—not the maximum. So it’s better to err on the side of caution with the final rule rather than force more ethanol into gasoline than is safe.”

Greco also announced a new TV, radio, and online ad campaign that will run inside the beltway, beginning next week.

“The ads will urge EPA and the White House to follow through with the proposal and cut back on ethanol mandates to protect consumers from the impending blend wall,” he said.

API represents all segments of America’s oil and natural gas industry. Its more than 600 members produce, process, and distribute most of the nation’s energy. The industry also supports 9.8 million U.S. jobs and 8 percent of the U.S. economy.