January 28, 2011 | Vol. 61, No. 3

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Dear PEI Member:

The Environmental Protection Agency (EPA) said on January 21 that it has approved the use of E15 for another subset of on-highway motor vehicles, this time allowing the use of gasoline containing up to 15 percent ethanol for model year 2001-2006 cars and trucks. But it added that no waiver will be granted for fuels up to 15 percent ethanol for use in any motorcycles, heavy-duty vehicles or nonroad engines because current test results do not support it.

EPA Administrator Lisa P. Jackson said she made the decision after reviewing thorough tests by the U.S. Department of Energy (DOE) and other available data on E15 effects on emissions from older cars and light trucks. "Recently completed testing and data analysis show that E15 does not harm emissions control equipment in newer cars and light trucks. Whenever sound science and the law supports steps to allow home-grown fuels in America's vehicles, this administration takes those steps," she said.

Last October, EPA approved the use of E15 for model year 2007 and newer vehicles as part of its response to a waiver petition filed by Growth Energy. This latest decision means that EPA has now approved the use of E15 for 60 percent to 65 percent of the vehicles on the road today. And according to the latest statistics from DOE, 93 percent of the vehicles on the road in 2015 will be able to use this fuel.

Producers of ethanol applauded EPA's decision and called it a move that will reduce the country's dependence on foreign oil and help the country meet federal ethanol mandates. The increase is opposed by car makers and power equipment manufacturers, which said consumers are likely to use E15 in products they did not warrant for E15 use. Environmentalists said the use of E15 would increase air pollution in U.S. cities, while meat producers warned the higher blend would raise their costs as increased demand for corn boosts animal feed prices. The National Petrochemical & Refiners Association blasted the decision, claiming that E15 "could cause engine failures that could leave consumers stranded, injured or worse, and hit consumers with costly engine repairs."

EPA's decision is only one step in a longer process that must occur before E15 becomes publicly available. As with any new fuel, additional testing and some regulatory issues relating to the fuel's properties―meeting an ASTM specification and vapor pressure limits on oxygenated blends during the summertime―must be addressed before E15 can be legally marketed. Labeling issues and misfueling concerns by retail gasoline marketers must still be confronted. And the largest impediment to broad use may be the costs involved in purchasing and installing listed equipment after government studies (see 11/23/10 TL) showed that some legacy equipment not listed for E15 did not perform well.

EPA Approves E15 for Older Cars

Appointments/Promotions

David Baley

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Some analysts say that it will be three to five years before E15 is widely available to motorists. I agree. First of all, understand that this decision permits―not mandates―the use of E15, so it will never be available at all retail outlets. The new fuel blend will have to be registered with EPA, meet state fuel quality standards, and gain approval from some state legislatures. Lawsuits filed by the oil industry and others attempting to derail the higher blend must be resolved. And EPA will have to finalize its E15 pump labeling rule―which we don't expect until the second half of the year at the earliest―to warn consumers not to use the wrong fuel.

Those retailers that decide to market the fuel will probably be independent marketers without major oil company contracts that prohibit them from selling E15. Our guess is that these marketers will initially be located in the 14 states (DE, IA, LA, MA, MD, MN, NJ, OH, PA, RI, SC, SD, TX, VT) and the District of Columbia which, according to Herman & Associates, currently do not have laws and/or regulations restricting E15 blending. And we expect the majority selling E15 will have equipment listed for the fuel, although some will rely on a regular equipment inspection to satisfy the requirements of the local regulators.

APPOINTMENTS AND PROMOTIONS
Petroleum Solutions, Inc., McAllen, Texas, has added two employees to its team. Kevin Jessup, who previously worked 30 years with Gilbarco, has joined PSI as the key account manager at the company's Houston branch. James Clem, with over 20 years of commercial credit experience, has joined PSI as corporate credit manager.
Jones & Frank, Raleigh, North Carolina, has hired Peter Meyer as its vice president-services. Meyer was most recently senior vice president for Fas Mart & Shore Stop Convenience Stores in Richmond, Virginia.
Tait Environmental Services Inc., Anaheim, California, has opened a new branch office in Houston, Texas. Gary Baker, formerly Tait's national sales manager, has been promoted to director and has moved to Houston. In other personnel moves, Alan Lopez has been hired as Tait's senior project manager for Southern California while Dennis Tweedy has joined the company as senior project manager for Northern California.

DEATHS
David Glenn Baley, former owner of King Manufacturing & Steel King Construction, died January 16 at his home in Arizona at the age of 71. He was the sole owner of the companies from 1972 until his retirement in 1995. His son, Warren, has been sole owner since 2004. He was preceded in death by his wife of 41 years, Judith. He is survived by his wife, Maggie Brown-Baley; sons David and Warren; and numerous grandchildren and great grandchildren.

ADMITTED TO PEI

The Leasing Experts, Inc., Miami, FL (aff)
Balkan Gazeteclik Yayincilik Matb. San. ve Tic Ltd. Sti., Istanbul Turkey (aff)
Owens-Corning, Conroe, TX (aff)

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The TulsaLetter (ISSN 0193-9467) is published two or three times each month by the Petroleum Equipment Institute. Robert N. Renkes, Executive Vice President, Editor. Opinions expressed are the opinions of the Editor. Basic circulation confined to PEI members.