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January 28, 2014

Attention: Docket ID No. EPA-HQ-OAR-2013-0479

The Honorable Gina McCarthy

Administrator

U.S. Environmental Protection Agency

1200 Pennsylvania Avenue, NW

Washington, DC 20460

VIA EMAIL

[email protected]

[email protected]

Re: Comments on Proposed Rule for 2014 Standards for the Renewable Fuel Standard Program(78 Fed. Reg. 71,732; November 29, 2013)

Dear Administrator McCarthy,

The Renewable Fuels Association (RFA) is pleased to submit the attached comments in response to the

U.S. Environmental Protection Agency’s (EPA) proposed rule regarding 2014 Standards for the

Renewable Fuel Standard (RFS) Program (78 Fed. Reg. 71,732; November 29, 2013).

RFA is the leading trade association for America’s ethanol industry. Its mission is to advance the

development, production, and use of fuel ethanol by strengthening America’s ethanol industry andraising awareness about the benefits of renewable fuels. Founded in 1981, RFA serves as the premier

meeting ground for industry leaders and supporters. RFA’s 300-plus members are working to help

America become cleaner, safer, more energy secure, and economically vibrant.

Given the unmitigated success of the RFS program to date, EPA’s proposal to substantially reduce 2014

renewable volume obligations (RVO) is as surprising as it is imprudent. EPA has apparently bought into

the oil industry’s fictitious 10 percent ethanol “blend wall” concept, and the Agency’s proposal

effectively halts the transformation of the liquid fuels marketplace just as it was beginning in earnest.

Had the Agency proposed keeping in place the RVO for renewable fuel at the statutory level of 14.4

billion gallons, the RFS program’s Renewable Identification Number (RIN) market mechanism would

have continued to function exactly as intended to ensure that required volumes of renewable fuels are

produced and consumed. But by proposing an RVO for renewable fuel that is below the “blend wall,”

the proposed rule completely eviscerates the RIN market. In this way, the most significant factor

contributing to the so-called “blend wall” in 2014 is EPA’s proposal itself . The baffling approach to

establishing annual RVOs set forth by EPA results in a circuitous, self-fulfilling prophecy that ultimately


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defeats the purpose of the RFS. In essence, EPA’s proposal seeks to make the alternative method of

complying with RFS requirements (i.e., purchasing and turning in banked RINs) less costly for obligated

parties than the intended primary method of compliance (i.e., purchasing and blending actual volumes

of renewable fuels). Plainly, this is a backward approach to complying with the RFS that belies

Congress’s intent. Restoring the efficacy of the RIN mechanism by setting the RVO at 14.4 billion gallons

would break this vicious circle and ensure the goals of the RFS are met.

Even beyond the factual inaccuracies that plague EPA’s proposal, there is a fundamental legal infirmity

as well: The Clean Air Act does not permit the Agency to take into account “factors that affect

consumption” in determining whether to grant a general waiver based on an “inadequate domestic

supply ” of renewable fuel. Instead, EPA may grant a waiver based on an “inadequate domestic supply”

of “renewable fuel” only where it finds that the renewable fuel industry lacks the capability to produce

the required volumes of renewable fuel, and where there are insufficient carryover RINs available for

obligated parties to meet the statutory RVO. The Agency has not made that showing here.

In the end, the RFS program was designed to force the oil industry to change the status quo—not to

perpetuate it. The entire purpose of this program would be subverted if the oil industry is rewarded for

its failure to take the steps necessary to ensure that it was capable of distributing, blending, and

dispensing the renewable fuel volumes required under the statute.

For these reasons, and for those set forth more fully in the attached comments, RFA is strongly opposed

to the proposal to reduce the 2014 RVO for renewable fuel from the statutory level of 14.4 billion

gallons to 13.01 billion gallons. We encourage EPA to reconsider its proposal and finalize the 2014

requirement for renewable fuel at 14.4 billion gallons—the level set by Congress.

Sincerely,

Bob Dinneen

President & CEO


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Comments of the

Renewable Fuels Association (RFA) on the

Proposed Rule for 2014 Standards for the

Renewable Fuel Standard Program

78 Fed. Reg. 71,732 (November 29, 2013)

Submitted January 28, 2014


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TABLE OF CONTENTS

I. Executive Summary ............................................................................................................................... 1

II. The RFS Has Worked as Intended. ........................................................................................................ 3

a. The RFS has provided real and meaningful benefits to the economy and environment of the

United States. ................................................................................................................................. 3

b.

With the lone exception of the oil industry, affected industries have responded to the clear

policy signals of the RFS Program. .................................................................................................. 6

III. EPA Has Failed to Justify the Need for a Waiver of the 2014 RVO for Ethanol. ................................... 7

a. Existing production capacity is capable of producing significantly more ethanol than is required

by the 2014 RVO. ............................................................................................................................ 8

b. The proposal’s analysis of “reasonably achievable” ethanol consumption in 2014 is

fundamentally flawed. EPA uses outdated 2014 gasoline demand projections, disregards therole of RINs in stimulating increased E15 and E85 consumption, and severely underetimates

current and potential ethanol consumption capacity. ................................................................... 8

i. EPA’s calculation of the E10 “blend wall” relies on an outdated projection of 2014 gasoline

demand. More recent projections from the Energy Information Administration (EIA) indicate

the E10 saturation point will be significantly higher than estimated by EPA. .......................... 9

ii. By proposing an RVO for renewable fuel that is below the E10 “blend wall,” the proposed

rule eviscerates the very mechanism (i.e., the RIN market) that would enable compliance

with statutory blending requirements. ................................................................................... 10

iii. The proposed rule largely ignores the demonstrated ability of RINs to induce expanded

consumption of E15 and E85 and stimulate investment in refueling infrastructure. ............. 13

1. The experience of 2013 proves that RINs can provide a strong economic incentive to

expand E85 production and consumption. .......................................................................... 13

2. Investment in E15 also grew rapidly in 2013 in response to elevated RIN prices. .............. 15

c. Existing vehicles, refueling infrastructure and carryover RINs are sufficient to facilitate

compliance with the statutory 14.4 billion gallon renewable fuel requirement in 2014. ........... 16

i. The existing vehicle fleet has the capacity to consume roughly 28 billion gallons of ethanol—

twice the amount of the unspecified renewable fuel required by the statute in 2014. ......... 17

ii. While higher RIN values would drive rapid expansion of renewable fuel refueling

infrastructure in 2014, the existing infrastructure is capable of distributing the statutorilyrequired volume of renewable fuel......................................................................................... 18

d. The proposed rule inappropriately ignores the availability of carryover RINs to assist obligated

parties with compliance in 2014. EPA’s proposed handling of carryover RINs in 2014 is arbitrary

and contradicts the Agency’s treatment of carryover RINs in previous rulemakings. ................. 21

e. Contrary to the claims of some oil companies, there is absolutely no evidence that higher RIN

prices contribute to higher retail gasoline prices ......................................................................... 23


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TABLE OF CONTENTS—cont’d

IV. If Finalized as Proposed, EPA’s 2014 RVO Rule Would Have Significant Negative Economic and

Environmental Consequences. ................................................................................................................... 26

a. A reduction in the RVO would negatively affect corn prices and farm income at a time when

corn prices are approaching cost-of-production (i.e., break-even) levels. .................................. 27

b. Reducing the RVO for renewable fuel would result in increased fossil fuel consumption, leading

to an increase in GHG emissions from the transportation sector. ............................................... 28

c.

Crude oil and retail gasoline prices would significantly increase under the proposed RVO. ....... 28

V. Contrary to EPA’s Proposal, the Statutory Basis for Granting a Waiver Based on an “Inadequate

Domestic Supply ” of “Renewable Fuels” Does Not Allow the Agency to Take Into Account “Factors that

Affect the Consumption of Renewable Fuels,” and It Requires the Agency to Take Into Account Carryover

RINs. ............................................................................................................................................................ 29

a. The phrase “inadequate domestic supply” of “renewable fuel” is unambiguous, and requires

the Agency to find both an inadequate capacity to produce renewable fuels, along with

insufficient carryover RINs available to meet the RVO. ............................................................... 31

i.

A plain reading of the phrase “supply” of “renewable fuel” means the capacity to producerenewable fuel and any available carryover RIN credits. ........................................................ 32

ii.

Congressional intent of the RFS program supports this definition. ........................................ 33

iii. The legislative history of the RFS program and the structure of the CAA more generally

support this definition. Case law supports this definition. ..................................................... 35

b. EPA’s proposed interpretation—reading “supply” to include concepts of “consumption” and

“distribution capacity”—is not reasonable or permissible; it turns settled principles of statutory

interpretation on its head; and as a result, it is not entitled to any deference under Chevron. 37

i. EPA’s proposed interpretation of “supply” would bend the meaning of that word past its

breaking point. ........................................................................................................................ 37

ii.

EPA’s proposed interpretation of “supply” contravenes the goals of the RFS program—

changing the status quo, rather than preserving it—by granting a waiver in a situation that

was within the oil industry’s control to rectify. ...................................................................... 38

iii. EPA’s proposed interpretation of “supply” contradicts the legislative history of the RFS

program and the structure of the CAA more generally. ......................................................... 40

iv. EPA’s interpretation of “supply” impermissibly contradicts its prior acknowledgement that

Congress set a high threshold for grant of a waiver. .............................................................. 41

VI. API and AFPM’s Proposal Fares No Better. These Organizations Have Failed to Demonstrate that

There is an Inadequate Domestic Supply of Renewable Fuel to Meet the 2014 RVO for Ethanol; Nor Have

They Demonstrated that Implementation of the RVO Would Cause Severe Economic Harm to Any State,Region, or the United States. ..................................................................................................................... 43

a. There is no way to square the industry petitioners’ proposal with the text, purpose, and

legislative history of the RFS program, or EPA’s prior interpretations of that program. ............. 44

i. Contrary to the position espoused by the industry petitioners, the general-waiver provision

refers to an “inadequate domestic supply” of “renewable fuel,” not gasoline or diesel. ...... 44

ii.

The industry petitioners’ proposal is contrary to the purpose of the RFS program. .............. 44


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TABLE OF CONTENTS—cont’d

iii. The industry petitioners’ proposal is contrary to the legislative history of the RFS program. 45

iv. The industry petitioners’ proposal is contrary to EPA’s own reading of the waiver provision.

................................................................................................................................................. 45

b. The industry petitioners have failed to demonstrate that implementing the 2014 RVO would

cause severe economic harm to any State, region, or the United States. ................................... 45

VII. EPA Should Undertake Additional Administrative Actions that Would Help Resolve Barriers to

Expanded Renewable Fuels Consumption and Facilitate Compliance with Future RFS Requirements. .... 47

a. Volatility (i.e., Reid vapor pressure) of E10 and E15 should be regulated consistently. EPA

should either extend the 1 psi RVP waiver to E15, or remove it altogether for E10. .................. 47

b. EPA should reconsider certain aspects of the required E15 Misfueling Mitigation and E15 Survey

Plans.............................................................................................................................................. 48

c. EPA should revise its guidance letter for administering the FFV weighting factor under the

CAFE/GHG rules. ........................................................................................................................... 49

d. EPA should support an investigation into anti-competitive behavior by oil companies and

practices designed to limit the ability of retail gas station owners to offer greater volumes ofbiofuel. .......................................................................................................................................... 49

e.

EPA should update its lifecycle GHG analysis of corn ethanol and baseline petroleum to ensure

policymakers and the public have a proper understanding of the carbon impacts associated

with fuels regulated under the RFS. ............................................................................................. 50

f. EPA and the White House Office of Management and Budget (OMB) should streamline the

process for approving new fuel pathways under the RFS. ........................................................... 51

VIII. Conclusion ........................................................................................................................................... 51


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ATTACHMENTS

Attachment 1: Bruce A. Babcock and Sebastien Pouliot, Iowa State University Center for Agricultural and

Rural Development, Feasibility and Cost of Increasing US Ethanol Consumption Beyond E10, CARD Policy

Brief 14-PB 17 (Jan. 2014), available at

https://www.card.iastate.edu/policy_briefs/display.aspx?id=1217.


Rural Development, The Economic Role of RIN Prices, CARD Policy Brief 13-PB 14 (Nov. 2013), available

at https://www.card.iastate.edu/publications/dbs/pdffiles/13pb14.pdf .

Attachment 3: Michael Hirtzer, Reuters, Analysis: High-ethanol gas - Not coming to a pump near you

(Nov. 27, 2013), available at http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-

idUSBRE9AQ1AU20131127.

Attachment 4: Informa Economics, LLC, Analysis of the Potential Use of Biofuels toward the Renewable

Fuel Standard in 2014 (Jan. 2014), available at http://www.ethanolrfa.org/page/-/rfa-association-

site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1 .

Attachment 5: Informa Economics, Inc., Analysis of Whether Higher Prices of Renewable Fuel Standard

RINs Affected Gasoline Prices in 2013 (Jan. 2014), available at www.ethanolrfa.org/page/-/rfa-

association-site/studies/Informa_Gasoline_Price_Analysis.pdf?nocdn=1.


Rural Development, RFS Compliance: Death Spiral or Investment in E85? , CARD Policy Brief 13-PB 16(Nov. 2013), available at http://www.card.iastate.edu/publications/dbs/pdffiles/13pb16.pdf .

Attachment 7: Sebastien Pouliot and Bruce A. Babcock, Iowa State University Center for Agricultural and

Rural Development, Impact of Increased Ethanol Mandates on Prices at the Pump, CARD Policy Brief 14-

PB 18 (Jan. 2014), available at http://www.card.iastate.edu/publications/dbs/pdffiles/14pb18.pdf .

Attachment 8: Susan Boland and Stefan Unnasch, Life Cycle Associates, Carbon Intensity of Marginal

Petroleum and Corn Ethanol Fuels, Report LCA.6075.83.2014 (Jan. 2014), Prepared for Renewable Fuels

Association, available at http://ethanolrfa.org/page/-/rfa-association-

site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1

Attachment 9: Letter from Bob Dinneen, President & CEO, RFA to Robert Perciasepe, Acting

Administrator, EPA, Jon Leibowitz, Chairman, Federal Trade Commission, Steven Chu, Secretary, U.S.

Department of Energy, Tom Vilsack, Secretary, U.S. Department of Agriculture, available at

http://ethanolrfa.org/page/-/PDFs/RFA%20Zarco%20Letter%203-19-13.pdf?nocdn=1

https://www.card.iastate.edu/policy_briefs/display.aspx?id=1217https://www.card.iastate.edu/publications/dbs/pdffiles/13pb14.pdfhttps://www.card.iastate.edu/publications/dbs/pdffiles/13pb14.pdfhttps://www.card.iastate.edu/publications/dbs/pdffiles/13pb14.pdfhttp://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Gasoline_Price_Analysis.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Gasoline_Price_Analysis.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Gasoline_Price_Analysis.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Gasoline_Price_Analysis.pdf?nocdn=1http://www.card.iastate.edu/publications/dbs/pdffiles/13pb16.pdfhttp://www.card.iastate.edu/publications/dbs/pdffiles/13pb16.pdfhttp://www.card.iastate.edu/publications/dbs/pdffiles/13pb16.pdfhttp://www.card.iastate.edu/publications/dbs/pdffiles/14pb18.pdfhttp://www.card.iastate.edu/publications/dbs/pdffiles/14pb18.pdfhttp://www.card.iastate.edu/publications/dbs/pdffiles/14pb18.pdfhttp://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://ethanolrfa.org/page/-/PDFs/RFA%20Zarco%20Letter%203-19-13.pdf?nocdn=1http://ethanolrfa.org/page/-/PDFs/RFA%20Zarco%20Letter%203-19-13.pdf?nocdn=1http://ethanolrfa.org/page/-/PDFs/RFA%20Zarco%20Letter%203-19-13.pdf?nocdn=1http://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://www.card.iastate.edu/publications/dbs/pdffiles/14pb18.pdfhttp://www.card.iastate.edu/publications/dbs/pdffiles/13pb16.pdfhttp://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Gasoline_Price_Analysis.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Gasoline_Price_Analysis.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127https://www.card.iastate.edu/publications/dbs/pdffiles/13pb14.pdfhttps://www.card.iastate.edu/policy_briefs/display.aspx?id=1217


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I. Executive Summary

The Renewable Fuels Association (RFA) submits these comments on EPA’s proposed rule for 2014

renewable volume obligations (RVOs) under the Clean Air Act’s (CAA) Renewable Fuel Standard (RFS).

EPA, 2014 Standards for the Renewable Fuel Standard Program; Proposed Rule, 78 Fed. Reg. 71,732

(Nov. 29, 2013).

EPA proposes to reduce the volume of total renewable fuel under the 2014 RVO from the statutory level

of 18.15 billion gallons to 15.21 billion gallons. The proposed reductions include cuts to the statutory

requirements for cellulosic biofuel and advanced biofuel, as well as a decrease to the requirement for

unspecified renewable fuel (i.e., the portion of the RVO for which corn starch ethanol may qualify) from

14.4 billion gallons to 13.01 billion gallons. In attempting to justify the proposed volume reductions, EPA

describes what it views as “two important realities.”1 First, the Agency cites perceived “[l]imitations in

the volume of ethanol that can be consumed in gasoline…, a set of factors commonly referred to as the

‘blendwall.’”

2

Second, EPA points to “[l]imitations in the ability of the industry to produce sufficientvolumes of qualifying renewable fuel.”3 But, even assuming that consumption is the relevant standard in

granting a waiver (it is not), these two “realities” are pure fiction.

Ironically, the most significant factor limiting consumption and contributing to the so- called “blend wall”

in 2014 is EPA’s proposal itself. Had the Agency proposed keeping in place the RVO for renewable fuel at

the statutory level of 14.4 billion gallons, the RFS program’s Renewable Identification Number (RIN)

market mechanism would have continued to function exactly as intended to ensure that required

volumes of renewable fuels were produced and consumed. But by proposing an RVO for renewable fuel

that is below the 10 percent ethanol (E10) “blend wall,” the proposed rule completely eviscerates the

RIN market—the very mechanism that would enable compliance with statutory blending requirements.Indeed, by emasculating the RIN mechanism and attempting to codify the “blend wall” as a basis for

modifying the 2014 RVO, EPA’s proposal establishes a process for setting annual RVOs that virtually

guarantees ethanol production and consumption will never expand beyond current levels.

The proposed rule’s baffling approach to setting annual RVOs results in a circuitous, self-fulfilling

prophecy that ultimately defeats the purpose of the RFS (i.e., EPA allows renewable fuel consumption

capacity to determine the level of the RVO, and thus consumption capacity never increases). Indeed, as

stated by Babcock & Pouliot (2014a) (Attachment 1), “If increased mandates [must] wait for the [E85 or

E15] stations to be built, mandates will never increase.”4 Restoring the efficacy of the RIN mechanism by

1 78 Fed. Reg. at 71,735.

2 Id .

3 Id .

4 Bruce A. Babcock and Sebastien Pouliot, Iowa State University Center for Agricultural and Rural Development,

Feasibility and Cost of Increasing US Ethanol Consumption Beyond E10, at 3. CARD Policy Brief 14-PB 17 (Jan. 2014)

(hereafter “Babcock & Pouliot (2014a)”), available at

https://www.card.iastate.edu/policy_briefs/display.aspx?id=1217.

https://www.card.iastate.edu/policy_briefs/display.aspx?id=1217https://www.card.iastate.edu/policy_briefs/display.aspx?id=1217https://www.card.iastate.edu/policy_briefs/display.aspx?id=1217


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setting the RVO at 14.4 billion gallons—a point above the E10 “blend wall”—would break this vicious

circle and ensure the goals of the RFS are met.

Relatedly, EPA’s proposal badly misjudges the domestic supply of ethanol, as well as the physical

capacity of existing vehicles and infrastructure to consume ethanol. The ethanol industry has the

capacity to supply substantially more renewable fuel than would be needed to meet the 14.4 billion

gallon RVO. Indeed, 1.24 billion renewable fuel (D-code 6) RINs were generated in December 2013,

demonstrating that the industry can supply at least 14.88 billion RINs to the market on an annualized

basis.5 Further, with a strong and consistent RIN signal in place, the vehicle fleet and refueling

infrastructure can consume the statutorily required volumes of renewable fuel. Even in a scenario where

ethanol production falls short of 14.4 billion gallons, the availability of billions of carryover RINs will

ensure the combined supply of RINs and physical gallons will be sufficient to meet the 14.4 billion gallon

RVO. Astonishingly, EPA’s proposal entirely omits the availability of carryover RINs to aid obligated

parties in meeting 2014 statutory requirements.

EPA adds to these infirmities by clearly overstepping the boundaries of its statutory waiver authority;

the Agency’s intended use of the “general” waiver provision in CAA 211(o)(7)(A) stands in clear violation

of the law. Although EPA has the authority to reduce the statutory renewable fuel volumes under

certain narrow conditions specified in the statute, the Agency’s interpretation of “inadequate domestic

supply”—reading conceptions of “consumption” into that phrase—and its adoption of the so-called

“blend wall” as a determinant of 2014 RVO levels are contrary to the text, purpose, structure and history

of the RFS program.

The RFS program is intended to gradually expand the availability and use of renewable fuels by

“replac[ing] or reduc[ing] the quantity of fossil fuel present in a transportation fuel”6; it achieves thispurpose by requiring that domestic producers and distributors of transportation fuel make available

steadily increasing volumes of renewable fuels each year. Mindful of this purpose, Congress granted EPA

only limited authority to waive the volume obligations under the program. EPA may do so only upon a

showing that: (i) the mandate will cause “severe” economic or environmental harm, or (ii) there is an

“inadequate domestic supply” of renewable fuel—which includes both the physical gallons that the

renewable fuel industry is capable of producing and any carryover RINs available—to satisfy the

requirements of the program. In attempting to justify its proposed use of the statute’s general -waiver

authority to reduce renewable fuel volumes, EPA suggests the phrase “inadequate domestic supply” can

be read to include “consideration of factors that affect consumption of renewable fuel.” But, EPA’s

interpretation bends the meaning of “supply” well past its breaking point.

5 EPA, RFS2 EMTS Informational Data (viewed January 24, 2014) (hereafter “EPA EMTS data), available at

http://www.epa.gov/otaq/fuels/rfsdata/index.htm .6 Clean Air Act § 211(o)(1)(J) (defining renewable fuel to mean “fuel that is produced from renewable biomass and

that is used to replace or reduce the quantity of fossil fuel present in transportation fuel” (emphasis added))

(codified at 42 U.S.C. § 7545(o)(1)(J)).

http://www.epa.gov/otaq/fuels/rfsdata/index.htmhttp://www.epa.gov/otaq/fuels/rfsdata/index.htmhttp://www.epa.gov/otaq/fuels/rfsdata/index.htm


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If finalized, EPA’s proposal for 2014 RFS requirements would place the key to our energy future firmly

back in the hands of the oil industry. By embracing the “blend wall” concept, the proposal effectively

destroys the incentive to expand biofuel production and distribution capacity, and allows oil companies

to blend only as much renewable fuel as they are comfortable using. The proposed rule would stifle

innovation and fundamentally alter the future course of the RFS program.

For these reasons, and for those set forth more fully below, RFA is strongly opposed to the proposal to

reduce the 2014 RVO for renewable fuel from the statutory level of 14.4 billion gallons to 13.01 billion

gallons. We encourage EPA to reconsider its proposal and finalize the 2014 requirement for renewable

fuel at 14.4 billion gallons—the level set by Congress.7

II. The RFS Has Worked as Intended.

The Energy Policy Act (EPAct) of 2005 established the first-ever RFS requiring the use of increasing

volumes of domestically produced renewable fuels. Recognizing the multiple benefits of renewable

fuels, Congress in 2007 passed the Energy Independence and Security Act, which modified and

expanded the RFS to 36 billion gallons per year by 2022. The manifold purposes of both the original RFS

and the expanded program were to bolster energy security, decrease fuel prices by diversifying our

energy portfolio, create jobs and stimulate the U.S. economy, and improve the environment. Without

question, the RFS is achieving those goals and providing meaningful benefits to the American public

each and every day.

a.

The RFS has provided real and meaningful benefits to the economy and environment

of the United States.

By any measure, the RFS has catalyzed important progress toward greater energy security, lower fuel

prices, a more diverse energy portfolio, a healthier economy, and a cleaner environment.

U.S. oil import dependency has fallen considerably since peaking in 2005, the year the original RFS was

adopted as part of EPAct. Net imports of crude oil and petroleum products accounted for more than 60

percent of total demand in 2005, a year in which ethanol production totaled just 3.9 billion gallons. Last

year, however, as ethanol production totaled 13.3 billion gallons, U.S. oil and petroleum product import

dependence had fallen to 35 percent of total demand.8 This marked the lowest rate of oil import

dependence since the early 1990s. In 2013, ethanol displaced the need for an amount of gasoline

refined from 462 million barrels of crude oil—more oil than the U.S. imported from Saudi Arabia. Today

ethanol represents 10 percent of the nation’s gasoline pool by volume, compared to 2.8 percent in

2005. Without ethanol and without the RFS, our 2013 rate of oil and petroleum product import

7 With regard to EPA’s proposed waiver of the statutory cellulosic biofuel volume, RFA supports the views and

recommendations outlined in comments submitted by the Advanced Ethanol Council to EPA-HQ-OAR-2013-0479.8 Based on EIA, Energy in Brief: How Dependent Are We on Foreign Oil? (July 13, 2012), available at

http://www.eia.gov/cfapps/energy_in_brief/foreign_oil_dependence.cfm?featureclicked=3/.

http://www.eia.gov/cfapps/energy_in_brief/foreign_oil_dependence.cfm?featureclicked=3/http://www.eia.gov/cfapps/energy_in_brief/foreign_oil_dependence.cfm?featureclicked=3/


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dependence would have been approximately 41 percent, rather than the actual rate of 35 percent

(Figure 1).

Sources: EIA (crude oil & petroleum product imports), RFA (analysis; *estimated)

Further, increased ethanol consumption has helped hold pump prices lower than they would be

otherwise. Because ethanol is regularly priced at a discount to gasoline at the wholesale level, and

because ethanol reduces aggregate demand for crude oil, increased use of ethanol is significantlylowering gasoline prices. According to recent analysis by energy economist Philip K. Verleger, a former

energy advisor to Presidents Ford and Carter, “…the U.S. renewable fuels program has cut annual

consumer expenditures in 2013 between $700 billion and $2.6 trillion. This translates to consumers

paying between $0.50 and $1.50 per gallon less for gasoline.”9 Economic analyses from Iowa State

University and the University of Wisconsin, Louisiana State University, Duke University, Merrill Lynch,

the U.S. Department of Energy’s National Renewable Energy Laboratory, and others have also concluded

that increased ethanol consumption substantially reduces retail gas prices.10

One of the policy objectives of the RFS was to address air pollution and global climate change. Because

ethanol reduces emissions of carbon monoxide (CO), carbon dioxide (CO2), exhaust hydrocarbons (VOC),

and fine particulates, it has played a key role in leading the way toward improved air quality and lower

carbon emissions from the transportation sector. According to EPA data, since 2000, mobile-sourced CO

9 Philip K. Verleger, PKVerleger, LLC, Commentary: Renewable Fuels Legislation Cuts Crude Prices (Sept. 23, 2013),

available at http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Commentary-

Renew%20Fuels%20Legislation%20Cuts%20Crude%20Ps_Verleger_2013.09.23.pdf?nocdn=1 .10

These analyses are available at http://www.ethanolrfa.org/pages/reports-and-studies#Petroleum

44%

53%

60%

49%

45%

40%

35%

45%

54%

62%

56%

52%

47%

41%

30%

35%

40%

45%

50%

55%

60%

65%

FIGURE 1. U.S. Crude Oil and Petroleum Product Import Dependence

With and Without Ethanol's Contribution

Actual Import Dependence Import Dependence Without Ethanol

http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Commentary-Renew%20Fuels%20Legislation%20Cuts%20Crude%20Ps_Verleger_2013.09.23.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Commentary-Renew%20Fuels%20Legislation%20Cuts%20Crude%20Ps_Verleger_2013.09.23.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Commentary-Renew%20Fuels%20Legislation%20Cuts%20Crude%20Ps_Verleger_2013.09.23.pdf?nocdn=1http://www.ethanolrfa.org/pages/reports-and-studies#Petroleumhttp://www.ethanolrfa.org/pages/reports-and-studies#Petroleumhttp://www.ethanolrfa.org/pages/reports-and-studies#Petroleumhttp://www.ethanolrfa.org/pages/reports-and-studies#Petroleumhttp://www.ethanolrfa.org/page/-/rfa-association-site/studies/Commentary-Renew%20Fuels%20Legislation%20Cuts%20Crude%20Ps_Verleger_2013.09.23.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Commentary-Renew%20Fuels%20Legislation%20Cuts%20Crude%20Ps_Verleger_2013.09.23.pdf?nocdn=1


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emissions have dropped 54 percent, VOC emissions are down 35 percent, and fine particulates have

fallen 27 percent.11 Further, the 13.3 billion gallons of ethanol produced in 2013 reduced CO2 emissions

by 37.9 million metric tons—equivalent to the annual emissions of nearly 8 million vehicles.12

Importantly, increased ethanol consumption is reducing demand for increasingly carbon-intensive

unconventional crude oil sources such as tar sands and tight oil from fracking. A recent study by Life

Cycle Associates (Attachment 8) concluded, “As the average carbon intensity of petroleum is gradually

increasing, the carbon intensity of corn ethanol is declining.”13 The study found that 2012-era corn

ethanol reduced GHG emissions by 32 percent relative to the average U.S. mix of petroleum, but 37-40

percent compared to tight oil and tar sands, respectively. EPA’s proposal would contribute to significant

backsliding on these environmental benefits.

Moreover, ethanol has become the single most important value-added market for American farmers,

stimulating investment and enhancing economic opportunities for farmers across the country. The

emergence of the ethanol industry over the past decade has served as an incredibly important catalyst,

transforming the grain sector from a stagnating, surplus-driven marketplace to one that is vibrant, high-tech, and demand-driven.

Source: U.S. Department of Agriculture

11 EPA, Air Trends, available at http://www.epa.gov/airtrends/index.html.

12 RFA calculations based on Argonne National Laboratory GREET1_2013 model, available at

http://greet.es.anl.gov/ .13

Susan Boland and Stefan Unnasch, Life Cycle Associates, Carbon Intensity of Marginal Petroleum and Corn

Ethanol Fuels, at 1 (Jan. 2014) (hereafter “Life Cycle Associates Report”), Report LCA.6075.83.2014, Prepared for

Renewable Fuels Association, available at http://ethanolrfa.org/page/-/rfa-association-

site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1 .

$0

$25

$50

$75

$100

$125

$150

$175

$200

$225

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

B i l l i o n

$

FIGURE 2. Value of Crops and Livestock & Net Farm Income

Crops Value Livestock Value Net Farm Income

http://www.epa.gov/airtrends/index.htmlhttp://www.epa.gov/airtrends/index.htmlhttp://greet.es.anl.gov/http://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://ethanolrfa.org/page/-/rfa-association-site/studies/LCA_Marginal_GHG_Emissions_2014.pdf?nocdn=1http://greet.es.anl.gov/http://www.epa.gov/airtrends/index.html


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The gross value of crops totaled $217 billion in 2013, while livestock receipts surged to a record level of

$182 billion.14 Net farm income hit a record $131 billion in 2013, up 15 percent from 2012 and more

than double the amount generated in 2009 (Figure 2).15 Meanwhile, farm equity and the value of farm

assets also rose to unprecedented levels in 2013.16

Clearly, the RFS has facilitated the achievement of tangible and significant economic and environmental

benefits. EPA’s final rule for 2014 RVOs should take into account the resoundingly positive impacts of

the RFS on American jobs, farm income, consumer fuel prices, U.S. energy security, air quality, and other

economic and environmental benefits. Failure to finalize the 2014 RVO for renewable fuel at 14.4 billion

gallons will undoubtedly lead to regression—rather than continued progress—on these important policy

objectives.

b.

With the lone exception of the oil industry, affected industries have responded to the

clear policy signals of the RFS Program.

The central purpose of the EISA was to expand the RFS and drive the usage of ethanol and other

renewable fuels far beyond their historical role as low-level fuel additives (e.g., 10 percent ethanol

blends, or “E10”). Thus, the need to move beyond E10 in 2014 for the purposes of RFS compliance

should hardly come as a surprise to obligated parties. When Congress expanded the RFS to 36 billion

gallons as part of EISA, it was abundantly clear to regulated industries that such large volumes of

renewable fuel could not be absorbed by the future gasoline market without incremental changes to the

vehicle fleet and fuel distribution infrastructure. Whether it was foreseeable that gasoline demand

would drop somewhat after passage of EISA in 2007 is irrelevant; there was absolutely an expectation at

that time that the RFS would soon push ethanol consumption well beyond the E10 level.

The renewable fuels industry responded to the passage of EISA by dramatically increasing production

capacity and investing in new feedstock and biofuel technologies. The agriculture sector responded by

increasing feedstock output and investing in technologies to sustainably increase productivity. The U.S.

automotive industry responded by substantially increasing its production of flexible-fuel vehicles (FFVs)

capable of operating on fuel blends containing up to 85 percent ethanol (E85). Today, more than 15

million FFVs are on the road and roughly 25 percent of new vehicles sold are FFV models.

Meanwhile, the petroleum industry steadfastly refused to work with downstream partners to undertake

the infrastructure preparations necessary to accommodate the incrementally larger volumes of

renewable fuels required under the RFS. The oil industry could easily rectify what it perceives to be

infrastructure deficiencies that purportedly stand in the way of satisfying the RFS. By allowing retailers

to install dispensers capable of distributing ethanol blends above E10, and by allowing storage of

14 U.S. Dept. of Agriculture, Economic Research Service, U.S. and State Farm Income and Wealth Statistics (viewed

January 2, 2014), available at http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx.15

Id.16

Id.

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approved blends above E10 in existing underground tanks currently mandated by the refiners to store

“premium” gasoline, obligated parties could indeed achieve Congress’s laudable goals of expanding

renewable fuels consumption. Instead, as explained more fully below, there is evidence that the

petroleum industry has actively subverted efforts to introduce larger volumes of renewable fuel to the

American public.

The oil industry maintains that the emergence of the so-called E10 “blend wall” in 2013 essentially

caught obligated parties by surprise. To the contrary, it was quite obvious by early 2009 that the arrival

of the “blend wall” would likely occur much sooner than was initially expected in 2007 when EISA was

signed into law. In fact, in the May 2009 draft regulatory impact analysis that accompanied EPA’s

proposed rule for the RFS2, the Agency wrote, “…under the proposed RFS2 program, we are projected

to hit the E10 ‘blend wall’…by 2013.”17 EPA’s final rule for the RFS2, published in February 2010,

underscored this point again, stating:

…the nation is expected to hit the blend wall in 2013 under our high-ethanol control case [and] in 2014 under our primary mid-ethanol

control case…. Regardless, to meet today’s RFS2 requirements using

increased volumes of ethanol we are going to need to see growth in FFV

and E85 infrastructure and increases in FFV E85 refueling rates.18

Unfortunately, many obligated parties chose to blatantly ignore the strong signals compelling them to

begin preparations for higher volumes of renewable fuels and to increase investments in storage and

distribution infrastructure. Now, oil companies seek relief from their renewable fuel blending

obligations, arguing that their failure to prepare for 2014 RFS requirements somehow merits reprieve.

And, contemptibly, EPA is proposing to grant just such relief. EPA should not reward such blatantdisregard for resoundingly clear policy signals, especially when other affected industries have invested

billions of dollars and valuable resources to facilitate the achievement of Congress’s commendable

goals.

III. EPA Has Failed to Justify the Need for a Waiver of the 2014 RVO for Ethanol.

Leaving aside, for now, the fact that EPA’s proposal clearly oversteps the bounds of the Agency’s

statutory waiver authority, the proposal fails to convincingly establish that the E10 “blend wall” is a

legitimate problem that cannot be resolved. EPA’s assertion that the 14.4 billion gallon renewable fuel

blending requirement cannot be met through existing infrastructure, vehicles and judicious use of

carryover RINs is simply not credible.

17 EPA, Draft Regulatory Impact Analysis: Changes to Renewable Fuel Standard Program, at 241 (May 2009), EPA-

420-D-09-001, EPA-HQ-OAR-2005-0161-3237.18

EPA, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis, at 241 (Feb. 2010), EPA-420-R-10-

006.


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a. Existing production capacity is capable of producing significantly more ethanol than is

required by the 2014 RVO.

As described more fully elsewhere in these comments, EPA’s general waiver authority is limited to cases

where enforcement of the RFS would cause “severe harm” to the economy or environment, or cases

where there is “inadequate domestic supply” of renewable fuels “…to fulfill the mandates.”19 Clearly,

neither of those conditions exists today, and it is inarguable that the U.S. ethanol industry has the

demonstrated capacity to supply the 2014 renewable fuel volumes envisioned by the statute. The U.S.

ethanol industry has the installed “nameplate” capacity to produce 14.88 billion gallons of corn starch

ethanol annually, and the physical capacity to produce approximately 15.6 billion gallons.20 In addition,

the industry has demonstrated that it can produce at an annualized rate of 14.4 billion gallons or greater

on several occasions in the past. For example, ethanol production averaged 944 million barrels per day

during the week ending December 6, 201321; this equates to an annualized “run rate” of 14.47 billion

gallons. Similarly, in the nine weeks between November 26, 2011, and January 27, 2012, production

averaged 946 million barrels per day, or an annualized rate of 14.51 billion gallons.

22

Notably, data fromEPA’s Moderated Transaction System (EMTS) shows that the biofuel industry generated a record 1.24

billion D6 RINs in December, indicating an annualized RIN generation rate of 14.88 billion RINs.23

Quite obviously, the existing renewable fuel industry has the proven capacity to “adequately supply” the

volume of domestically produced renewable fuel required by the statute.

b. The proposal’s analysis of “reasonably achievable” ethanol consumption in 2014 is

fundamentally flawed. EPA uses outdated 2014 gasoline demand projections,

disregards the role of RINs in stimulating increased E15 and E85 consumption, and

severely underestimates current and potential ethanol consumption capacity.

As detailed in later sections of these comments, Congress clearly did not intend for EPA to consider

perceived constraints on “consumption” (i.e., demand) as a determinant in setting annual RVOs.

However, to the extent the proposal relies on such an unlawful factor, it grossly miscalculates the

amount of ethanol consumption that is “reasonably achievable” in 2014. We therefore offer the

19 EPA, Renewable Fuel Standard Program (RFS2) Summary and Analysis of Comments, at 8-19 (Feb. 2010), EPA-

420-R-10-003, EPA-HQ-OAR-2005-0161-3188. 20

RFA, Biorefinery Locations (viewed January 17, 2014), available at http://www.ethanolrfa.org/bio-refinery-

locations/. “Nameplate capacity” refers to production capacity under normal operating conditions. Historically,

ethanol plants have operated above “nameplate capacity” when market conditions have warranted doing do. Here

we conservatively assume ethanol plants have, on average, the ability to exceed “nameplate capacity” by 5%

(consistent with EPA’s allowance for RIN generation on production volumes equivalent to 105% of “baseline”

grandfathered volumes).21

EIA, Weekly U.S. Oxygenate Plant Production of Fuel Ethanol (viewed January 21, 2014), available at

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPOOXE_YOP_NUS_MBBLD&f=W 22

Id .23

EPA EMTS data.

http://www.ethanolrfa.org/bio-refinery-locations/http://www.ethanolrfa.org/bio-refinery-locations/http://www.ethanolrfa.org/bio-refinery-locations/http://www.ethanolrfa.org/bio-refinery-locations/http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPOOXE_YOP_NUS_MBBLD&f=Whttp://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPOOXE_YOP_NUS_MBBLD&f=Whttp://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPOOXE_YOP_NUS_MBBLD&f=Whttp://www.ethanolrfa.org/bio-refinery-locations/http://www.ethanolrfa.org/bio-refinery-locations/


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following remarks aimed at improving EPA’s understanding of the marketplace’s current and near-term

capabilities.

i. EPA’s calculation of the E10 “blend wall” relies on an outdated projection of

2014 gasoline demand. More recent projections from the Energy Information

Administration (EIA) indicate the E10 saturation point will be significantly

higher than estimated by EPA.

As outlined above, the purported E10 “blend wall” and perceived limitations on the ability to consume

ethanol are not among the statutory criteria that may trigger a waiver of the total renewable fuel

volumes required. Still, even if the E10 “blend wall” was a legitimate and allowable criterion for setting

the annual RVO for renewable fuel, the proposal’s estimate of the E10 saturation point in 2014 is far too

low.

As the starting point for its determination of “reasonably achievable” ethanol consumption in 2014,

EPA’s proposal calculates the maximum amount of ethanol that can be consumed in 10 percent ethanol

blends (i.e., the E10 “blend wall”). EPA uses projections from EIA’s 2013 Annual Energy Outlook to

estimate 2014 gasoline (E10) demand at 131.67 billion gallons. The Agency suggests this amount of

gasoline could absorb 13.17 billion gallons of ethanol as E10.24 The proposal later implies that EPA is

assuming just 12.73-13.02 billion gallons of ethanol could be consumed as E10 in 2014.25

But the latest available EIA Short-term Energy Outlook (STEO), upon which EPA is required to base its

final RVO percentage standards, significantly raises the projection of 2014 gasoline demand.26 The STEO

projects 2014 gasoline consumption at 134.6 billion gallons, implying that the gasoline pool could absorb

a maximum of 13.46 billion gallons of ethanol as E10. Similarly, EIA’s 2014 Annual Energy Outlook EarlyRelease projects 2014 motor gasoline energy demand at 16.36 quadrillion BTUs, which is equivalent to

135.12 billion gallons of E10. This level of demand implies maximum consumption of 13.51 billion

gallons of ethanol as E10.27 Finally, the most recent STEO shows gasoline (E10) demand averaged 8.91

million barrels per day (equivalent to 136.59 billion gallons annualized) in the second half of 2013,

indicating that consumption is on the rise.28 Thus, the “blend wall” implied by actual gasoline

consumption in the second half of 2013 is some 500 million gallons higher than the proposal’s estima te

of the “blend wall” for 2014 (Figure 3).

24 78 Fed. Reg. at 71,758.

25 78 Fed. Reg. at 71,762.

26 EIA, Short-term Energy Outlook , at 33 (Jan. 2014) (hereafter “January 2014 EIA STEO”), available at

http://www.eia.gov/forecasts/steo/pdf/steo_full.pdf .27

EIA, 2014 Annual Energy Outlook, Early Release, at Table 1: Total Energy Consumption (Dec. 16, 2013), available

at http://www.eia.gov/forecasts/aeo/er/tables_ref.cfm .28

January 2014 EIA STEO.

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By underestimating 2014 gasoline demand, EPA’s starting point for “reasonably achievable” ethanol

consumption is inappropriately low. Based on EIA’s updated 2014 gasoline demand projections alone,

EPA should raise its estimate of “reasonably achievable” ethanol consumption in E10 by 300-500 million

gallons—even under the Agency’s legally mistaken belief that “supply” incorporates concepts of

“consumption.”

ii.

By proposing an RVO for renewable fuel that is below the E10 “blend wall,”the proposed rule eviscerates the very mechanism (i.e., the RIN market) that

would enable compliance with statutory blending requirements.

In addition to providing compliance flexibility for obligated parties, the RIN system was expressly

designed to stimulate investment in expanded renewable fuels production and distribution capacity. As

renewable fuel blending requirements approach or exceed perceived market barriers such as the E10

“blend wall,” demand for detached RINs for compliance will increase and, naturally, prices will rise.

When RIN prices are lower than the equivalent cost of installing infrastructure to dispense ethanol

blends above E10, obligated parties will purchase RINs on the open market to cover blending obligations

above the “blend wall.” But as demand for RINs increases and prices rise, rational obligated parties will,

at some price point, find it more economical to invest in the infrastructure necessary to distribute high-

level ethanol blends than it is to purchase RINs on the open market. As explained by Babcock & Pouliot

(2013a) (Attachment 2), “The cure for high compliance costs is investment in E85 and E15

13.17

13.4613.51

13.66

12.73

12.512.612.712.812.913.013.113.213.313.4

13.513.613.7

EPA NPRM:

2014 Ethanol

Consumption in E10

EPA NPRM:

Max. Ethanol in E10

[based on AEO2013]

EIA 1/2014 STEO:

Max. Ethanol in E10

EIA AEO2014:

Max. Ethanol in E10

2H2013 Max.

Ethanol in E10,

Annualized

(Based on Actual GasConsumption)

[EIA 1/2014 STEO]

B i l l i o n

G a l l o n s

FIGURE 3. 2014 Maximum Ethanol Consumption in E10 Blends:

EPA Proposal vs. Recent EIA Projections and 2013 Actual

13.02


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infrastructures, which, in turn, would allow for the higher future biofuel consumption levels that are

envisioned in current policy.”29

Installing the infrastructure to dispense greater volumes of E85 and E15 decreases pressure on the RIN

market, results in lower RIN prices and, in turn, lowers compliance costs for obligated parties. Babcock &

Pouliot (2014a) show that every $1 of investment in E85 infrastructure would reduce compliance costs

for obligated parties by $108 in 2014 if the statutory RVO was maintained. In other words, rational

economic actors considering the financial tradeoffs associated with meeting RFS obligations would favor

installation of infrastructure over purchasing detached RINs. Assuming no new E85 or E15 retail

infrastructure is installed in the near term, setting the 2014 RVO for renewable fuel at the statutory level

of 14.4 billion gallons would result in an average RIN price of $0.69, according to Babcock & Pouliot

(2014a). But if only 500 additional E85 stations are added (roughly a 15 percent increase over existing

E85 stations), average RIN prices fall to just $0.18. According to the report , “[t]his drop in RIN price

represents more than a $7 billion drop in the total value of RINs than would be used for compliance in

2014.”

30

Meanwhile, “[t]he cost of adding the additional stations would be $65 million.”

31

This exampleclearly demonstrates how RINs effectively function to incentivize the investments that would facilitate

expanded ethanol consumption and compliance with statutory RFS requirements.

FIGURE 4. Prices for Ethanol, RBOB Gasoline, and RINs

29 Bruce A. Babcock and Sebastien Pouliot, Iowa State University Center for Agricultural and Rural Development,

The Economic Role of RIN Prices, at 4. CARD Policy Brief 13-PB 14 (Nov. 2013) (hereafter “Babcock & Pouliot

(2013a)”), available at https://www.card.iastate.edu/publications/dbs/pdffiles/13pb14.pdf . 30

Babcock & Pouliot (2014a), at 2.31

Id.

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At the same time, higher RIN prices enable retail discounting of E15, E85, and mid-level blends

(“MLBs”)32 by lowering the effective cost of ethanol in the blend. That is, a marketer who purchases

ethanol (with RINs attached) and blends it with gasoline to make E15, E85 or MLBs can separate the

RINs from the ethanol gallons and sell them to obligated parties who need additional RINs for

compliance. As such, the sale of RINs allows marketers and retailers to reduce the price of E15, E85 and

MLBs for consumers, thus stimulating increased consumption (Figure 4).

Unfortunately, EPA’s proposal has greatly diminished the economic incentive to invest in the

infrastructure necessary to dispense higher-level ethanol blends and has impaired the ability of retailers

to offer E85 and E15 at meaningful discounts to E10. By adopting the oil industry’s “blend wall” concept,

EPA’s proposal destabilizes the RIN mechanism and eliminates the means of driving investment in

expanded renewable fuel production and distribution infrastructure. In essence, EPA’s proposal seeks to

make the alternative method of complying with RFS requirements (i.e., purchasing and turning in

banked RINs) less costly for obligated parties than the intended primary method of compliance (i.e.,

purchasing and blending physical volumes of renewable fuels). This is plainly a backward approach tocomplying with the RFS.

RIN prices fell dramatically upon the leak of EPA’s draft proposed rule for in October 2013. As reported

by Reuters, the EPA’s proposal has already deterred oil companies from following through on major

plans to install infrastructure capable of distributing ethanol blends above E10 (Attachment 3).33 Protec

Fuels, a company that sells and installs blender pumps and E85 dispensers, told Reuters that plans to

install or retrofit pumps at approximately 450 stations were immediately put on hold following the

publication of EPA’s proposed rule. This deal alone would have increased the number of stations

offering E85 nationwide by nearly 14 percent. According to Steve Walk, Protec’s vice president, “It was

just starting to get to the point where oil companies were saying, ‘Fine, we'll start putting in alternative

fuels.’ Now, those conversations have gone by the wayside.” Reuters reported that the suspension of

Protec’s planned E85 projects “…is just one example of the blows suffered by the nascent E85 industry,

which has relied heavily on the road map laid out in the federal Renewable Fuel Standard (RFS)

program.”

Setting the 2014 RVO for renewable fuel at the statutory level of 14.4 billion gallons would restore the

efficacy of the RIN market mechanism and drive the investments necessary to facilitate compliance in

2014 and beyond.

32 Mid-level blends, or MLBs, are gasoline/ethanol blends containing 16-50% ethanol by volume.

33 Michael Hirtzer, Reuters, Analysis: High-ethanol gas - Not coming to a pump near you (Nov. 27, 2013) (hereafter

“Reuters E85 article”), available at http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-

idUSBRE9AQ1AU20131127 .

http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127http://www.reuters.com/article/2013/11/27/us-usa-ethanol-e85-analysis-idUSBRE9AQ1AU20131127


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iii. The proposed rule largely ignores the demonstrated ability of RINs to induce

expanded consumption of E15 and E85 and stimulate investment in refueling

infrastructure.

As described above, EPA’s proposal—which sets the RVO for renewable fuel below the E10 “blend

wall”—has undermined the RIN mechanism and halted the transformation of the liquid fuels

marketplace just as it was beginning in earnest. The experience of 2013 clearly demonstrates that RINs

will function exactly as intended to drive investment in E85 and E15 infrastructure, facilitate discounted

pricing at the pump, and allow obligated parties to meet statutory RFS requirements.

1. The experience of 2013 proves that RINs can provide a strong

economic incentive to expand E85 production and consumption.

Higher RIN prices in the spring and summer of 2013 led to dramatic growth in E85 consumption.

Progressive fuel blenders and marketers purchased ethanol (with RINs attached), blended it to make

E85, separated the RINs from the gallons, and sold them to refiners who had chosen to buy RINs rather

than physical gallons of ethanol to comply with RFS. Thus, the sale of RINs allowed enterprising retailers

and marketers to reduce the price of E85 for consumers. At many E85 stations during the summer, E85

was offered at a price at or below its energy equivalent value to E10, meaning the consumer’s cost per

mile on E85 was the same or less than the cost per mile on E10. In a recent analysis, the EIA chronicled

RIN-driven changes in E85 prices, finding that “…recent declines in E85 prices at stations offering that

fuel in several Midwestern states have brought E85 close to price parity with regular gasoline on an

energy content basis.”34

As expected, consumers responded to lower E85 prices in 2013 by increasing consumption. While thereare no reliable data tracking national E85 sales volumes, at least two state agencies track E85

consumption in their states. Data from both agencies indicate dramatic growth in E85 sales in 2013, as

the discount between E85 and E10 widened and FFV owners responded to lower E85 prices. The data

also clearly indicate that E85 sales volumes were well correlated to the movements in RIN prices. That is,

as RIN prices increased, there was a concomitant increase in E85 sales. Minnesota Department of

Commerce data show that E85 sales in the state nearly tripled between January and August as RIN

prices increased from an average of $0.13 to an average of $0.79 (Figure 5).35 Predictably, E85 sales

volumes fell in October and November as RIN prices declined from their summer highs following the

leak of EPA’s proposed rule. Similarly, data from the Iowa Department of Revenue show E85 sales in the

state doubled from the first quarter of 2013 to the third quarter, as quarterly average RIN prices also

34 EIA, Today in Energy: E85 motor fuel is increasingly price-competitive with gasoline in parts of the Midwest (Sept.

19, 2013), available at http://www.eia.gov/todayinenergy/detail.cfm?id=13031 .35

Minnesota Dept. of Commerce, 2013 Minnesota E85 + Mid-Blends Station Report (viewed January 8, 2014)

(hereafter “MNDOC E85 Station Report”), available at http://mn.gov/commerce/energy/images/E-85-Fuel-Use-

Data.pdf .

http://www.eia.gov/todayinenergy/detail.cfm?id=13031http://www.eia.gov/todayinenergy/detail.cfm?id=13031http://mn.gov/commerce/energy/images/E-85-Fuel-Use-Data.pdfhttp://mn.gov/commerce/energy/images/E-85-Fuel-Use-Data.pdfhttp://mn.gov/commerce/energy/images/E-85-Fuel-Use-Data.pdfhttp://mn.gov/commerce/energy/images/E-85-Fuel-Use-Data.pdfhttp://mn.gov/commerce/energy/images/E-85-Fuel-Use-Data.pdfhttp://www.eia.gov/todayinenergy/detail.cfm?id=13031


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doubled (Figure 6).36 The direct causal relationship between RIN prices and E85 sales volumes is further

discussed in a recent analysis conducted by Informa Economics (Attachment 4).37

The E85 growth trends indicated by the Minnesota and Iowa data certainly would have continued—or

accelerated—had RIN prices remained at elevated levels. Logically, if the E85 pricing experienced during

36 Iowa Dept. of Revenue, Motor Fuel Tax Forms and Information: E85 Quarterly Report —Gallons Sold (viewed

January 18, 2014), available at http://www.iowa.gov/tax/forms/motor.html .37

Informa Economics, LLC, Analysis of the Potential Use of Biofuels toward the Renewable Fuel Standard in 2014

(Jan. 2014) (hereafter “Informa 2014 RFS Report”), available at http://www.ethanolrfa.org/page/-/rfa-association-

site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1 .

$-

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2,200,000

J a n - 1 3

F e b - 1 3

M a r - 1 3

A p r - 1 3

M a y - 1 3

J u n - 1 3

J u l - 1 3

A u g - 1 3

S e p - 1 3

O c t - 1 3

N o v - 1 3

R I N P

r i c e ( $ / C r e d i t )

E 8 5 G a l l o n s S o l d

FIGURE 5. Minnesota E85 Sales vs. RIN Price

E85 Sold (Left)

Avg. RIN Price (Right)

$-

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2013Q1 2013Q2 2013Q3

R I N P

r i c e ( $ / C r

e d i t )

E 8 5 G a l l o n s S

o l d

FIGURE 6. Iowa E85 Sales vs. RIN Price

E85 Sold (Left)

Avg. RIN Price (Right)

http://www.iowa.gov/tax/forms/motor.htmlhttp://www.iowa.gov/tax/forms/motor.htmlhttp://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.ethanolrfa.org/page/-/rfa-association-site/studies/Informa_Potential_Use_of_Biofuels_toward_RFS_2014.pdf?nocdn=1http://www.iowa.gov/tax/forms/motor.html


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the summer of 2013 had been sustained, an increasing number of FFV drivers would have become

aware of the attractive pricing and E85 demand would have increased further.

Ethanol producers also responded to increased demand for E85 in 2013 by ramping up onsite blending

of the fuel and selling it directly to wholesalers and retailers. RFA surveyed ethanol production facilities

in the fall of 2013 to gain insight into onsite E85 blending and direct sales. Of the 38 plants responding

to the survey, 18 indicated that they were registered as a “blender of record” and had produced E85

onsite. Data provided by the 18 plants showed a 179 percent increase in the volume of E85 sold

between January and June 2013, a period in which RIN prices increased seven-fold. The 18 plants had

produced and sold a total of 27 million gallons of E85 between January and September 2013, indicating

an annualized total of approximately 36 million gallons.

EPA appears to recognize that RINs provide a strong economic incentive to reduce pump prices for E85

relative to E10. According to the proposal, “The RIN price functions as a mechanism to subsidize the

price of ethanol sold as E85 until it is at or below price parity with gasoline on an energy-equivalentbasis….”38 EPA further states that “[t]he recent shift in E85 prices relative to E10 and the simultaneous

increase in E85 sales suggest the importance of paying careful attention to more recent data concerning

E85 prices and sales volumes when projecting E85 volumes in 2014.”39 Given this recognition, it is

perplexing that EPA failed in its projection of 2014 E85 consumption to account for the demonstrated

ability of RINs to drive favorable E85 pricing and expanded usage. Indeed, EPA curiously states that it is

“…not in a position to estimate E85 consumption based on data or modeling involving the price

relationship between E10 and E85.”40

2. Investment in E15 also grew rapidly in 2013 in response to elevated

RIN prices.

Increased RIN values also drove greater investment in E15 in 2013. The first gallons of E15 were sold at a

retail gas station in Lawrence, Kansas, in July 2012, and at the beginning of 2013 approximately 10 retail

gas stations were offering E15.41 Today, an estimated 70 stations are selling E15 and others have

announced plans to begin offering the blend in the near future.

Nearly 18 months after the first sale of E15 to the public, an estimated 4 million gallons of E15 have

been sold from retail stations in 12 states and consumed in vehicles built in 2001 or later. It is estimated

that roughly 80 million miles have been driven on E15 since its introduction. While the volume of E15

sold to date is relatively small, there is tremendous potential to rapidly expand E15 consumption given

38 78 Fed. Reg. at 71,760.

39 Id .

40 Id .

41 RFA , First Station in the Nation Offers E15 in Kansas (July 11, 2012), available at

http://www.ethanolrfa.org/news/entry/first-station-in-the-nation-offers-e15-in-kansas/ .

http://www.ethanolrfa.org/news/entry/first-station-in-the-nation-offers-e15-in-kansas/http://www.ethanolrfa.org/news/entry/first-station-in-the-nation-offers-e15-in-kansas/http://www.ethanolrfa.org/news/entry/first-station-in-the-nation-offers-e15-in-kansas/


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the low cost of infrastructure upgrades and the large percentage of the existing automotive fleet that

may legally use E15.

Further, the E15 experience to date has demonstrated quite clearly that the fuel is safe, effective and

economical. Users of E15 over the past 18 months have not experienced the deleterious engine effects

suggested by the oil industry. In fact, there has not been a single reported and confirmed case of engine

damage or inferior performance due to E15. Similarly, there have been no reported and confirmed cases

of E15 misfueling in non-approved equipment.

On December 11, 2013, Murphy USA began offering E15 (and E85) at a retail gas station in Arkansas, and

the company announced its intent to sell E15 and E85 at additional stations in its large network.42 The

announcement was significant in that it marked the first venture into E15 by a major retail chain

(Murphy USA operates nearly 1,200 stores in 23 states). If other major retailers follow Murphy’s lead

(which may be necessary to remain competitive in the markets where Murphy operates), retail access to

E15 could expand rapidly, and total ethanol consumption could grow dramatically.

Similarly, MAPCO Express, Inc. announced on January 15, 2014, that it will offer E15 at every gasoline

pump at approximately 100 of its retail gasoline stations.43 This project alone would nearly triple the

number of stations offering E15 and would increase the number of pumps dispensing E15 by an

estimated factor of eight. In announcing the initiative, MAPCO Vice President of Business Development

Dan Gordon stated, “Ethanol based fuels have been a lower per-gallon cost alternative over the past few

years and this should allow us to offer our customers additional fuel options.”44

Given these recent developments in the E15 marketplace, it is surprising that EPA entirely neglected the

potential use of E15 in 2014 as a pathway to compliance with statutory blending requirements. Weencourage EPA to reconsider its decision to exclude any potential contribution from E15 in its estimate

of potential ethanol consumption in 2014.

c. Existing vehicles, refueling infrastructure and carryover RINs are sufficient to facilitate

compliance with the statutory 14.4 billion gallon renewable fuel requirement in 2014.

EPA’s proposal appears to adopt the oil industry’s contention that the emergence of the E10 “blend

wall” prevents obligated parties from fulfilling their statutory blending requirements under the RFS in

2014 and beyond. EPA apparently agrees with the oil industry that current infrastructure cannot deliver,

and the current automotive fleet cannot consume, the volume of renewable fuels necessary to meet the

RFS in 2014 and subsequent years.

42 Convenience Store News, Murphy USA Opens Arkansas’ First E15 Station (Dec. 12, 2013), available at

http://www.csnews.com/top-story-fuels-c64-murphy_usa_opens_arkansas__first_e15_station-64954.html .43

Business Wire (MAPCO Press Release), MAPCO to offer E15 to customers in 2014 (Jan. 15, 2014), available at

http://www.businesswire.com/news/home/20140115005879/en/MAPCO-offer-E15-Customers-2014 .44

Id .

http://www.csnews.com/top-story-fuels-c64-murphy_usa_opens_arkansas__first_e15_station-64954.htmlhttp://www.csnews.com/top-story-fuels-c64-murphy_usa_opens_arkansas__first_e15_station-64954.htmlhttp://www.businesswire.com/news/home/20140115005879/en/MAPCO-offer-E15-Customers-2014http://www.businesswire.com/news/home/20140115005879/en/MAPCO-offer-E15-Customers-2014http://www.csnews.com/top-story-fuels-c64-murphy_usa_opens_arkansas__first_e15_station-64954.html


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Even if these were statutorily relevant factors in setting the RVO for 2014, the underlying factual

assumptions are incorrect. Setting the renewable fuel blending requirement at 14.4 billion gallons in

2014 would result in a strong and consistent RIN signal, which would drive investment in infrastructure,

stimulate increased E15 and E85 consumption and facilitate compliance with statutory RVOs in 2014 and

beyond. Still, even if no new ethanol blending infrastructure is installed in 2014, independent analyses

demonstrate that the 14.4 billion gallon requirement could be easily met through the use of existing

refueling infrastructure, existing vehicles and—as a last resort—the use of some carryover RINs.

i.

The existing vehicle fleet has the capacity to consume roughly 28 billion

gallons of ethanol—twice the amount of the unspecified renewable fuel

required by the statute in 2014.

Light-duty vehicle compatibility with blends above E10 is not a significant limiting factor in expanding

ethanol consumption beyond the “blend wall.”

EIA data show that 15.4 FFVs capable of operating on blends up to E85 were sold from 1998 through

2012.45 Assuming 2013 FFV production and sales levels were consistent with 2012 rates, approximately

17.8 million FFVs have been sold since 1998. Even if it is assumed that all pre-2002 FFVs have been

scrapped and are no longer in service (based on an average vehicle lifespan of 11 years), there would

still be 15.9 million FFVs on U.S. roadways today. Accordingly, the current fleet of FFVs alone is capable

of consuming roughly 7.4 billion gallons of ethanol annually (9.5 billion gallons of E85).46 In contrast, EPA

appears to assume the existing stock of FFVs totals just 11.5 million. 47

In addition, we estimate approximately 80 percent of current light-duty automobiles in service were

built in 2001 or later, meaning four out of every five cars and light trucks on the road are approved byEPA to use E15. Further, the use of E15 is explicitly approved by the manufactures of more than 60

percent of model year (MY) 2014 light-duty vehicles sold in the United States. 48 Automakers offering

unequivocal E15 warranty coverage for some or all of their MY2014 vehicles include General Motors,

Ford, Toyota, Honda, Volkswagen, Mercedes-Benz, Jaguar, and Land Rover. Moreover, all automakers

manufacturing FFVs, including Chrysler, Nissan and Audi, warranty the use of E15 in FFV models.

45 EIA, Onroad Alternative Fuel Vehicle Made Available (downloaded Dec. 2013), available at

http://www.afdc.energy.gov/uploads/data/data_source/10299/10299_afv_available.xlsx .46 Assumes average annual fuel consumption per vehicle is 600 gallons. Assumes E85 average ethanol content of

77%.47

David Korotney, Mem. to Docket Re: Application of one-in-four E85 access methodology to 2014 (Nov. 21, 2013),

EPA-HQ-OAR-2013-0479-0026. The memorandum appears to adopt EIA’s estimate of FFV stock from the 2013

Annual Energy Outlook.48

The 60% figure was derived by examining automaker warranty statements for MY2014 vehicles and automotive

sales 2013 market share data provided by Motor Intelligence. A full list of recommended gasoline language from

MY2012-14 warranty statements is available at http://ethanolrfa.3cdn.net/5d6a40bd996bde2dcc_rem6i2gep.pdf .

http://www.afdc.energy.gov/uploads/data/data_source/10299/10299_afv_available.xlsxhttp://ethanolrfa.3cdn.net/5d6a40bd996bde2dcc_rem6i2gep.pdfhttp://ethanolrfa.3cdn.net/5d6a40bd996bde2dcc_rem6i2gep.pdfhttp://ethanolrfa.3cdn.net/5d6a40bd996bde2dcc_rem6i2gep.pdfhttp://ethanolrfa.3cdn.net/5d6a40bd996bde2dcc_rem6i2gep.pdfhttp://www.afdc.energy.gov/uploads/data/data_source/10299/10299_afv_available.xlsx


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The oil industry is correct that E15 is not explicitly addressed in warranty statements and owners’

manuals for automobiles built before 2011, but that’s because E15 did not exist as a legal fuel in the

marketplace at the time those vehicles were built and their warranty statements were printed . As a

matter of policy, automakers do not modify or change vehicle warranties retroactively based on changes

in the marketplace. Thus, it is simply incorrect to argue that concern about the effect of E15 on engines

is the primary reason that automakers have not retroactively warrantied pre-2011 vehicles for E15.

Rather, the reason automakers have not retroactively warrantied pre-2011 vehicles for E15 is that they

don’t retroactively modify warranties for any reason.

In all, the current light-duty automotive fleet has the legal and technical capacity to consume more than

28 billion gallons of ethanol annually.49 This capacity will only increase in the future as more FFVs enter

the fleet, and the percentage of the fleet represented by vehicles built in 2001 or later continues to

grow. Clearly, the capacity of the existing vehicle fleet to consume ethanol is not a limiting factor that

would prevent compliance with the 2014 statutory renewable fuel requirement of 14.4 billion gallons.

ii. While higher RIN values would drive rapid expansion of renewable fuel

refueling infrastructure in 2014, the existing infrastructure is capable of

distributing the statutorily required volume of renewable fuel.

As described in previous sections of these comments, setting the RVO for renewable fuel at the

statutory level of 14.4 billion gallons would restore the RIN-driven incentive to expand refueling

infrastructure capable of delivering ethanol blends above E10. Yet, even if no new infrastructure is

installed in 2014, research shows that the existing refueling infrastructure could deliver the ethanol

volume needed to comply with the statutory renewable fuel requirement of 14.4 billion gallons—again,

assuming that consumption is the relevant standard in granting a waiver (as we explain below, it is not).

EPA appears to assume that E85 is currently offered at 2,990 stations nationwide.50 Based on growth

trends dating back to 2005, the Agency projects that approximately 330 new stations may begin selling

E85 in 2014 and that total E85 stations will rise to 3,306 by the end of the year.51 However, other

sources—including one referenced by EPA—show that 3,267 stations are already selling E85 (9 percent

higher than EPA’s estimate).52 Thus, if E85 market conditions in 2014 are similar to 2013, it would be

more reasonable to project that approximately 3,600 stations will be selling E85 by the end of 2014.

49 Assumptions: Current light-duty fleet=230 million vehicles; 71% of existing fleet consumes 600 gallons of E15 per

vehicle per year; 9% of existing fleet consumes 700 gallons of E85 (77% ethanol) per vehicle per year; 20% of

existing fleet consumes 580 gallons of E10 per vehicle per year.50

David Korotney, Mem. to Docket Re: Application of one-in-four E85 access methodology to 2014 (Nov. 21, 2013),

EPA-HQ-OAR-2013-0479-0026.51

Id .52

See E85 Prices.com, http://www.e85prices.com/ (viewed Jan. 17, 2014).

http://www.e85prices.com/http://www.e85prices.com/http://www.e85prices.com/http://www.e85prices.com/


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If it is conservatively assumed that each of these 3,600 stations sold an average of 20,000-25,000 gallons

of E85 per month, total ethanol consumption via E85 would be approximately 600-800 million gallons

(data from the Minnesota Department of Commerce show some stations were selling 40,000-50,000

gallons of E85 per month during the summer of 2013 when RIN prices were elevated).53 Babcock &

Pouliot (2013b) estimate that 500-750 million gallons of ethanol would be consu

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