Bob Greco's remarks at press briefing teleconference on E15 CRC fuel system auto study

As prepared for delivery

Press briefing teleconference on E15 CRC fuel system auto study
Robert Greco, API group director, downstream and industry operations
Tuesday, January 29, 2013

Opening statement:

Good morning everyone. Thanks for calling in.

In 2010 and 2011, EPA gave the green light to use E15 – the 15 percent ethanol gasoline blend – in model-year-2001-and-later cars and some other vehicles. EPA’s action was irresponsible. EPA knew E15 vehicle testing was ongoing but decided not to wait for the results.

A key part of the testing – which was conducted by the Coordinating Research Council (CRC), an organization created and supported by the oil and auto industries – was completed last May. That research demonstrated that E15 could damage valve and valve seat engine parts in some of the tested vehicles, which included a number of common brands.

Now, more CRC research results are available. They conclude that putting E15 in America’s gas tanks could damage millions of vehicles and put motorist safety at risk.

This additional E15 testing, completed this month, has identified an elevated incidence of fuel pump failures, fuel system component swelling, and impairment of fuel measurement systems in some of the vehicles tested. E15 could cause erratic and misleading fuel gauge readings or cause faulty check engine light illuminations. It also could cause critical components to break and stop fuel flow to the engine. Failure of these components could result in breakdowns that leave consumers stranded on busy roads and highways.

Fuel system component problems did not develop in the CRC tests when either E10 or E0 was used.

It is difficult to precisely calculate how many vehicles E15 could harm. That depends on how widely it is used and other factors. But, given the kinds of vehicles tested, it is safe to say that millions could be impacted.

The testing did not include every kind of engine and fuel system in use, so vehicles with different equipment might also be affected.

EPA cited DOE’s E15 research to justify its approval. However, DOE’s research looked only at E15 impacts on vehicle catalysts. While DOE may have checked other vehicle parts, the catalyst test was not designed to accurately test them. The CRC used more robust, widely accepted testing protocols and also tested other vehicles.

EPA also knew that most auto manufacturers recommend use of ethanol blends only up to E10, and nearly all indicate that use of higher blends could affect warranty coverage. Only in flex fuel vehicles and a few of today’s newest cars has the manufacturer given the o.k. for E15.

The value of the vehicles that CRC testing suggests could be harmed by E15 runs into many billions of dollars. This is a potential cost American motorists would have to shoulder.

Why did EPA move forward prematurely? Part of the answer may be the need to raise the permissible concentration level of ethanol so that greater volumes could be used, as required by the federal Renewable Fuel Standard. Most gasoline sold today is an E10 blend, but rising volume requirements under the law can’t be met much longer without going to higher blends.

When Congress passed the law, it could not know it was creating this problem. Today we know. The answer is to repeal the RFS before it puts millions of vehicles and many motorists at risk.

Repeal also makes sense for other reasons. The world has changed since the RFS was enacted in 2007. Consumer demand for fuels has dropped, while domestic supplies of crude oil have grown dramatically because of the revolution in shale oil and natural gas development in the U.S. This has reduced imports, one of the stated purposes of the RFS.

Moreover, asking for repeal of the RFS is not an indictment of renewable fuels. Ethanol is well established and has desirable blending properties, so there are reasons why America’s refiners would use it with or without the law.

Ironically, EPA’s premature E15 decision could threaten broader use of ethanol and other biofuels. If E15 is used and vehicles are harmed in the way CRC’s research suggests, public support for ethanol and the federal renewable fuels program could erode.

API has sued EPA to force it to change its decision on E15. That case is still before the courts, and we are strongly considering taking it to the Supreme Court.

There are other serious potential problems related to EPA’s decision to force E15 into the marketplace. First, E15 could harm engines for which EPA did not intend it to be used. EPA said it was illegal to use E15 in pre-2001 vehicles or in other internal combustion engines in heavy-duty trucks and buses, motorcycles, in recreational equipment, such as boats, snowmobiles, or in various kinds of agricultural and yard equipment such as chainsaws and weedwackers. However, segregating fuels and educating or warning consumers not to use E15 in these other vehicles and engines will be costly and difficult. And, despite best efforts, some misfueling will likely occur and could cause damage.

Second, there’s the issue of service station pumps. EPA knew at the time it approved E15 that government labs had raised red flags about the compatibility of E15 with much of the dispensing and storage infrastructure at our nation’s gas stations. E15 in contact with the storage and pumping equipment can cause corrosion leading to spills. Unfortunately, determining which pumps and other infrastructure can accommodate E15 and which can’t is unlikely to be obvious to the thousands and thousands of small businessmen and women who own the vast majority of America’s filling stations.

EPA should pull back its decision on E15. The CRC research shows millions of America’s vehicles aren’t ready for it, and the government should not expose consumers to this problem.

Thank you. The CRC research will be available on its website later this morning, and we’ll make sure you have a copy.