On May 31, 2019, the U.S. Environmental Protection Agency (EPA) issued a final rule allowing the year-round sale of motor gasoline blends containing up to 15 percent ethanol (E15) and thereby increasing the availability of E15 blends in the United States. Prior to that, E15 was not sold during the summer months, defined as June 1 to September 15, to limit evaporative emissions that contribute to ground-level ozone. Most motor gasoline sold in the United States contains up to 10 percent ethanol (E10). Under free market conditions, some ethanol is added to gasoline for its value as an oxygenate, creating a cleaner burning fuel and raising the octane rating of motor gasoline, which is useful in today’s higher compression, more efficient engines.
However, the use of ethanol can be problematic. Ethanol is corrosive to rubber and certain metals and can damage the fuel lines of boats, lawnmowers, and other small engine equipment. Ethanol also attracts and bonds with water from the air, and that water can separate inside a fuel tank, forming a brown goo that can clog pumps and filters.
E15 is currently available in 30 states at just over 2,000 stations. Although most new fueling stations have installed equipment that is E15 compliant, older stations that are just E10 compliant may need to install new equipment to accommodate the more corrosive nature of E15 gasoline blends. Retrofits may be cost-prohibitive if they require major equipment overhauls, such as underground storage tanks, to be replaced.
U.S. Gets Most of Its Ethanol from Corn
U.S. ethanol facilities use about 40 percent of the total U.S. corn crop, according to the Department of Agriculture. Corn use for ethanol has more than tripled since 2005 when George W. Bush enacted the Renewable Fuel Standard, which forces refiners to blend biofuels into transportation fuels. Under the law, the EPA sets annual and generally increasing quotas for conventional renewable fuel (usually corn-based ethanol), advanced ethanol alternatives made from non-edible material and biodiesel. Ethanol now accounts for over 10 percent of U.S. gasoline usage—an increase from less than one-tenth of 1 percent in 1993.
The United States produces its ethanol from corn while countries such as Brazil produce it from sugar cane. Corn has a lower ethanol yield than does sugar cane. Ethanol also yields about a third less energy per gallon than gasoline, so mileage drops off with more ethanol usage.
Ethanol Requirements Raises the Cost of Transportation Fuel
Fuel costs for Americans are artificially inflated due to the low energy content of ethanol, and also by the high costs faced by fuel companies trying to comply with ill-conceived fuel regulations, such as the need to buy Renewable Identification Numbers (RINs) if they have not blended sufficient ethanol into gasoline. The Congressional Budget Office found that raising the mandated use of corn ethanol results in higher motor-fuel prices.
Higher ethanol blends such as E15 sell for lower prices relative to E10 because the price of ethanol is generally lower than gasoline blend stock. Presently, E15 is sold at a 3- to 10-cent/gallon price discount relative to E10, or 87 octane blends, in most markets.
The Renewable Fuel Standard forces refiners to blend ethanol into gasoline or purchase sufficient RINs to comply with the mandate, thereby increasing the cost of motor gasoline due to ethanol’s lower efficiency and the cost of RINs. Due to ethanol’s corrosive properties and affinity for water, consumers need to be aware, particularly when using ethanol blends in boats, lawn mowers, and small engines.