In the United States, gasoline is a mix of 10% ethanol and petroleum fuel.  Since 2009, the Environmental Protection Agency has been considering a change to the ruling that would permit fuel stations to sell a mix of E15 (15% ethanol).  This switch is opposed by automakers, who are concerned with engine longevity issues when using E15.  In 2010, I wrote, “Some ethanol groups are starting to push for immediate approval of E12 (12% ethanol) as the tests continue.  As a result, I would not be surprised to hear, come November [2010], the EPA will delay a decision again until 2011 without any action on E12.”  Well, the approval of E15 didn’t end up coming until April 2, 2012 for 2001 and later model year vehicles, and as expected there was no movement on E12.

But the controversy didn’t come to a close on April 2, as many might have hoped.  Since that time, E15 adoption has been very low.  Now, AAA, the auto and travel association, has issued a warning that E15 could “damage millions of vehicles and void car warranties.” This warning can be expected to have an impact on the sale of E15, since AAA claims to have over 50 million members.  That number represents almost a quarter of the 209.6 million licensed drivers in the United States, giving AAA a big voice in the debate.

What does this mean for E15?  It seems likely that AAA’s foray into the arguments will likely scare off some stations that were considering making the investment to offer E15.  Making things worse, blender pumps, which would be the most affordable method for delivering E15 to the market, are required to sell a minimum of 4 gallons of fuel to prevent damage to small engines, such as lawnmowers.  Blender pumps blend gasoline and ethanol at the 10% proportion at the time of refueling, so new storage tanks would not be required, but since fuel remains in the hose some E15 would get into small engines and potentially cause damage.

The cost of E15 is below gasoline (about $3.28/gallon this past summer), but it also has 5% less energy than gasoline (about 2% less than E10) and therefore could ultimately cost consumers more as a result of reduced fuel economy.  One might surmise that since it might cost more, the fuel isn’t widely available, many stations don’t want to carry it, automakers warn it can’t be used in their vehicles, people have to buy a minimum amount in many cases, and now AAA is all but telling its members not use it, that the EPA would reconsider.  Don’t count on it.  Lawsuits from the automakers were thrown out this summer and the EPA has shown no signs of revisiting the topic.  One thing I think we can count on is more E15 controversy to come.