Renewable Fuel Standard Primer Low Res

Renewable Fuel Standard
Fill Up On Facts
Americas Oil and Natural Gas Industry
August 2015
For the latest report, please visit www.api.org/policy-and-issues/fuels and

www.filluponfacts.com
Table of Contents
Fill Up On Facts
What is the RFS?..............................................................................................Page 1
Problems with Predicting Demand ...................................................................Page 2
Problems with Predicting Supply ......................................................................Page 3
Problems with Choosing Technologies .............................................................Page 4
What is The Blend Wall? ................................................................................Page 5
Running Up Against the Blend Wall ...............................................................Page 6
E15 and Your Car .............................................................................................Page 7
The RFS Is Broken............................................................................................Page 8
The RFS - Economics and Security ..................................................................Page 9
Magical Thinking on E85 and Ethanol Mandates ..............................................Page 10
E15 in Chicago .................................................................................................Page 11
Potential Vehicle Damage .................................................................................Page 12,13,14
Chain Restaurants on the RFS Ethanol Mandate..............................................Page 15
The RFS and Outdoor Power Equipment .........................................................Page 16,17
The National Turkey Foundation on the RFS.....................................................Page 18
E15 - A Bumpy Ride for Motorcyclists ..............................................................Page 19,20
RFS Ethanol Mandates a Kitchen Table Issue...................................................Page 21,22
Rising Ethanol Blends Dont Float All Boats ......................................................Page 23,24
Resources ........................................................................................................Page 25
The Renewable Fuel Standard:

Fill Up On Facts | August 2015
What is the RFS?

Renewable Fuel Standard
(billions of gallons per year)
40
30
20
10
0
2010
2012
2014
2016
2018
2020
Biomass Based Diesel:
Non-Cellulosic Advanced:
Advanced Cellulosic Biofuel
Conventional Renewable Fuel Corn Ethanol
Biodiesel - Ester
Sugar Ethanol
60% GHC Reduction
20% GHC Reduction (For new construction only.
Standalone Renewable Diesel
Co-processed Renewable Diesel
20% GHC Reduction
20% GHC Reduction
2022
Existing corn facilities grandfathered.)
Source: EPA. Visit: http://www.epa.gov/otaq/renewablefuels/420f10007.pdf
The Energy Independence and Security Act of 2007

(EISA07) included an expanded Renewable Fuel
Standard (RFS2), which the EPA used to develop a final
rule effective July 1, 2010. To comply with the RFS2
biofuel producers and importers must blend increasing
amounts of biofuels into gasoline and diesel,

Petroleum refiners and importers then must acquire

sufficient RINs to demonstrate compliance with RFS2
based on the amount of gasoline and diesel they
produce and/or import. The RFS2 is complex with four
nested volumetric mandates: total renewable biofuel,
advanced biofuel, cellulosic biofuel and biomass-based
diesel.
Page 1
Problems with Predicting Demand

Motor Gasoline Consumption
(hundred billion gallons per year)
1.8
hundred billion gallons per year
1.7
1.6
1.5
Reality Gap
1.4
1.3
1.2
1.1
2008
2010
2012
2014
Projected 2007
2016
2018
2020
2022
Actual and 2014 Projected
Source: U.S. Energy Information Administration Annual Energy Outlooks 2007 to 2013. Visit: http://1.usa.gov/122CHde
EISA07 was based on significantly greater gasoline

demand projections, but the U.S. Energy Information
Administrations 2013 outlook for 2022 projects 25
percent lower demand vs. the 2007 outlook, when
EISA07 was enacted. Cellulosic technologies were
expected to develop within a few years of EISA07,
but by the end of 2014, only one plant in the U.S.
was producing cellulosic ethanol.

Declining gasoline demand, combined with increasing

mandates, means we are approaching the limit of
blending ethanol into gasoline (10 percent ethanol or
E10) for widespread use. The EPA rushed through
approval of an up to 15 percent ethanol blend (E15)
without adequate testing. In addition to compatibility
problems with E15, expanded use of another alternative
fuel (E85), has not occurred due to poor consumer
acceptance and significant infrastructure and cost
challenges.
Page 2
Problems with Predicting Supply

Crude Oil Domestic Crude Production
(million barrels per day)
10
million barrels per day
Reality Gap
4
2008
2010
2012
2014
2016
Actual and 2014 Forecast
2018
2020
2022
2018
2020
2022
2007 Forecast
Gross Imports Crude

(million barrels per day)
14
million barrels per day
12
10
Reality Gap
4
2008
2010
2012
2014
2016
Actual and 2014 Forecast
2007 Forecast
EISA07 also assumed declining domestic production of

crude oil and far greater crude oil imports. Both of these
assumptions have been completely reversed by the
shale oil revolution and dramatically increased
North American energy production the U.S. is now the

worlds leading oil and natural gas superpower. The RFS
is thus based on an economics and security perspective
much different from the reality of today.Page 3
Problems with Choosing Technologies

Cellulosic Biofuel Mandate
(millions of gallons)
1250
1,000
millions of gallons
1000
750
500
500
Reality Gap
250
250
100
0
0.02
2010
2011
2012
EISA Mandate
0.142
2013
Actual Production (through end July 2013)
Source: Energy Independence and Security Act of 2007. Visit: http://1.usa.gov/16qoPca and Environmental Protection Agency, Visit: http://www.epa.gov/otaq/fuels/rfsdata/2013emts.htm
Source
Contrary to claims, the EPA mandate for increased use

of cellulosic biofuels is disconnected from reality. Though
there was no commercial cellulosic production in 2010,
EPA set the mandate for 2011 at 6.6 million gallons.
There was no commercial production in 2011, either, yet
EPA mandated 8.65 million gallons for 2012.
May 2014 to 810,185 gallons to reflect actual supply. In

December 2014, the EPA announced that it would not
release the 2014 target until 2015. With each passing
year, EPA targets diverge further and further from actual
production, creating expensive uncertainty for refineries
busy meeting American fuel needs.
A total of 20,000 gallons were produced in 2012, but it

was exported to Brazil and didnt count toward RFS2
compliance (chart above). The original target of one
billion gallons set for 2013 was retroactively reduced in

Page 4
What is the Blend Wall?

Ethanol Share of U.S.Gasoline Consumption 2009-2014
(percent by volume, blue highlights projected values)
11
percent by volume
10
6
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2009Q2 2009Q4
2010Q2
2010Q4
2011Q2
2011Q4
2012Q2
2012Q4
2013Q2
2013Q4
2014Q2
2014Q4
2015Q2
2015Q4
Ethanol Share of U.S. Gasoline Consumption
As biofuel mandates increase, the ethanol volume

required for blending into gasoline will exceed 10
percent known as the E10 Blend Wall. Declining
gasoline demand accelerates and exacerbates the
Blend Wall. EIA demand projections for gasoline, E85
and combined ethanol consumption indicate RFS2
targets will not be met even if the cellulosic standard is

waived notwithstanding EIAs optimistic projections

about E15/E85 acceptance. The oil industrys ability to
supply gasoline (as limited by the E10 Blend Wall) does
not meet EIA demand projections.
Page 5
Running Up Against the Blend Wall

Running Up Against the Blend Wall
Obligated Parties
(OPs) seek
compliance
through available
mechanisms
RVO increases as
fuel production
decreases
Economic Harm in 2015
Renewable Volume Obligation

(RVO) exceeds market ability to
absorb renewable fuels (Blend Wall)
$770 billion decrease in GDP

$2,700 decrease in Average
Household Consumption
Cycle RepeatsEconomic Harm Intensifies
Individual OPs reduce

production to decrease
RVO and remain
in compliance
When the Blend Wall is

Reached, NERA Found:
Maximizing biofuel blending alone
does not ensure compliance.
Companies could comply by reducing
the volume of fuel supplied to the
domestic market
EPA raises
Compliance
Percentage for
next year
Source
Source: NERA
Economic Consulting
A study by NERA Economic Consulting buttresses the

argument that the RFS2 is irretrievably broken. The
study details the approaching ethanol Blend Wall, the
point at which ethanol mandates under the RFS2 force
more ethanol into the nations fuel supply than is safe for
most motorists and their vehicles. According to NERA,
continued implementation of RFS ethanol mandates by
2015 could:

Lead to fuel supply disruptions that ripple adversely

through the economy.
Cause the cost of diesel to rise 300 percent and
the cost of gasoline to rise 30 percent.
Decrease U.S. GDP by $770 billion.
Reduce worker take-home pay by more than
$580 billion.
Page 6
E15 and Your Car
Vehicle Manufacturers and E15

Auto manufacturers and models recommendations for E15 in non-flex fuel vehicles as of January 2015.
Most vehicles on the road today arent recommended for operating on E15 by manufacturers.
MODEL YEAR
MANUFACTURER
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
BMW
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Chrysler
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Ford
No
No
No
No
No
No
No
No
No
No
No
No
Yes
Yes
Yes
GM
No
No
No
No
No
No
No
No
No
No
No
Yes
Yes
Yes
Most4
Honda/Acura
No
No
No
No
No
No
No
No
No
No
No
No
No
Some1
Yes
Hyundai/Kia
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Jaguar
No
No
No
No
No
No
No
No
No
No
No
No
No
Yes
Yes
Yes
Land Rover
No
No
No
No
No
No
No
No
No
No
No
No
No
Yes
Mazda
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Mercedes
No
No
No
No
No
No
No
No
No
No
No
No
No
Some
Mitsubishi
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
2
Some5
No
Nissan
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Subaru
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Toyota/Lexus
No
No
No
No
No
No
No
No
No
No
No
No
No
Some3
Most6
VW/Audi/
Porsche
No
No
No
No
No
No
No
No
No
No
No
No
No
Yes
Yes
Volvo
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Source: http://www.edmunds.com/ownership/howto/articles/120189/article.html and auto company contacts

Accord, Civic, Crosstour, CR-V, CR-Z, Insight, Odyssey, Pilot; Acura: ILX, MDX, RDX, RLX, but not Ridgeline, TL, TSX
C, CLA, CL, E, GL, GLK, M, S, SL, SLK, but not CLS, G, SLS AMG
Avalon, Camry, Corolla, Highlander, iQ, Prius, RAV-4, Scion tC, Sienna, Venza; Lexus: CT200H, ES350, GS300/350, GS450H, IS250, IS350, LS460, RX350, RX450H, but not 4Runner, FJ
Cruiser, Land Cruiser, Sequoia, Tacoma, Tundra, Yaris; Lexus: IS250C, IS350C, IS F, GX460, LX570
Not Chevrolet City Express
GL, M, S Sedan, SL, SLK, but not C, CLS, E, G, GLA, GLK, S Coupe, SLS AMG
Not xB, FRS
Testing by the Coordinating Research Council (CRC),

which has been the gold standard in vehicular research
for the better part of a century, determined that millions
of vehicles on the road today could suffer engine
damage from using fuels containing higher levels of
ethanol than for which they were designed. Likewise,
a separate CRC study found that fuel pump systems
could seize up or otherwise be damaged by highercontent ethanol fuel.
the standard grade used in the U.S. that contains up

to 10 percent ethanol). These include automakers,
AAA, the California Air Resources Board (CARB), and
environmental non-profits. The stakes are high for
consumers who could be left stranded on the roadside
and/or stuck with potentially expensive repair bills.
As a result, a number of groups are concerned about

efforts to force increased use of E15 gasoline, fuel
that contains up to 15 percent ethanol (compared to

Page 7
The RFS Is Broken
The RFS is indeed broken. In November the EPA

basically agreed, announcing it was giving up on issuing
ethanol-use requirements for 2014 with just a little over
a month to go. Instead, the agency said it will complete
the 2014 targets in 2015 prior to or in conjunction with
action on the 2015 standards rule.
The agencys inability to meet the RFS deadline it
hasnt actually met the statutory deadline once in the
past five years (though the 2011 rule was only nine days
late, close enough to call it on time) offers little hope
that things will improve. The RFS is an example of topdown central planning thats detached from reality and
which has created distortions in the marketplace and
uncertainty among those whore obligated to operate
under it.

What the RFS has become is an illustration of the pitfalls

of government trying to mandate consumer behavior
through a program whose goals have largely been
achieved by surging U.S. energy production.
The Renewable Fuel Standard (RFS) is indeed broken.
In November the EPA basically agreed, announcing it
was giving up on issuing ethanol-use requirements for
2014 already a year overdue with just a little over a
month to go in the calendar year. Instead, the agency
said it will complete the 2014 targets in 2015 prior to or
in conjunction with action on the 2015 standards rule
standards that also are late.
Page 8
The RFS Economics and Security

Change in Fuel Supply Between 2008 and 2014
(thousand barrels per day)
6k
$3582 Billion
Domestic Crude Production
thousand barrels per day
4k
2k
$328.5 Billion
Domestic Ethanol Production
0k
-2k
-4k
-6k
$-6016 Billion
Net Imports
-8k
Domestic Crude Production
Domestic Ethanol Production
Net Imports
Source: EIA Monthly Energy Review. Accessed April 23, 2013
With the supporters of increased ethanol use waging

an aggressive campaign to defend the flawed RFS2, it
has never been more critical to push forward the facts.
This means telling the truth about ethanols appropriate
role in the overall fuel picture, the performance of fuels
containing higher levels of ethanol and the markets tepid
embrace of it and the fantasy of the EPAs cellulosic
biofuels mandate. Some key facts:
Contrary to some claims, ethanol is not responsible
for lower U.S. oil imports. From 2008 through 2014,
net imports have fallen by more than 6 million barrels
per day while domestic oil production has increased
by more than 3.5 million barrels per day. While
ethanol production has increased by 328,500 barrels
per day over that period, it is far too small to deserve
credit for reduced imports.

Contrary to claims, ethanol is primarily an additive

to gasoline, not a replacement for gasoline. It is
only a replacement for gasoline when sold as E85
fuel. In 2012, only 100.2 million gallons of E85 were
sold, meaning that as a fuel (rather than an additive),
ethanol displaced just 50.7 million gallons of gasoline
when you account for ethanols lower energy
content. Context: The U.S. consumes about 352
million gallons of gasoline every day.
Page 9
Magical Thinking on E85 and Ethanol Mandates

2,500k
500
2,000k
400
1,500k
300
1,000k
200
500k
100
0k
-500k
-100
Oct-97 Nov-98 Nov-99 Nov-00 Nov-01 Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14
Feb-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Jul-98 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14
Stations Open
Gallons Total
Source: Service stations and monthly E85 sales in Minnesota. Visit: http://mn.gov
Some have suggested that requiring more production

of higher ethanol-blend fuels like E15 and E85 can
satisfy RFS mandates but these measures expensive,
temporary at best, and could have serious impacts on
consumers and the broader economy.
E85 has several limitations, for starters, only flex-fuel
vehicles (FFVs) can use it, which becomes a logistical
issue because theres a lack of E85 pumps across
the country only about 2,500 retail stations out of
more than 150,000 offer it. Thats not because Big
Oil is blocking the sale of E85, but because theres a
lack of consumer demand (see chart). Next, theres a
mismatch between pump locations and FFVs, illustrated
by a recent Department of Energy (DOE) Inspector
Generals report that found DOE has been fueling its
FFVs with regular gasoline instead of E85, eliminating
many supposed environmental or cost benefits of
having a fleet of cars that can use fuel containing up
to 83 percent ethanol. And finally, E85 has not been
competitive just look at AAAs website that tracks retail
E85 prices.
RFS supporters, desperate to avoid the blend wall
suggest that E85 be heavily discounted to reach
maximum sales, but the numbers have not added
up: actual sales of E85 have never come close to the
annual rate which would be needed and E85 has been

more costly on an energy-equivalent basis. Such
arguments ignore ethanol market dynamics. Ethanol
production has expanded and the U.S. has been a net
exporter of ethanol since 2010. Trade flows of ethanol
are responding to market signals, which appear to be
placing a higher value on ethanol for its use as a lowlevel blend gasoline blendstock than as a high-level
blend as a gasoline replacement (such as E85).
As suggested by economic theory, it is entirely possible
that markets would place a higher value on marginal
ethanol (above what can be consumed in E10) as
an export product. The economic law of supply and
demand is at work, and it is not pointing to E85 being
heavily discounted to gasoline containing 10 percent
ethanol.
Trying to come up with fantastical solutions to justify
bad policies are just another distraction from the real
problem: The RFS is fundamentally flawed and its
ethanol mandates are broken. Rather than trying to push
higher ethanol-blend fuels into the market, which the
consumer isnt demanding (E85) or which could harm
engines (E15), we need the Congress to address the
RFS with long-term and meaningful action.
Page 10
Stations
Gallons
Monthly E85 Stations and Sales
E15 in Chicago
most cars on the road are not approved by their

manufacturers for E15. Why would the city council use
your engine as a guinea pig? Chicago Tribune
Chicago Mayor Rahm Emanuel and his allies on the city
council deserve credit for putting a stop for now at
least to an ill-conceived proposal that would mandate
the sale of higher ethanol blend E15 fuel at city service
stations. Ill-conceived because, as argued here and here
earlier this year, the E15 requirement could be full of risk
for consumers and small business owners while mainly
benefiting ethanol producers. Recently, AAA urged
Chicago lawmakers to vote against the ordinance.

Later, the Chicago Tribune editorialized:

The touted cost savings and environmental benefits
are dubious. E15 produces less energy than regular
gasoline, so vehicles would get fewer miles to the
gallon on it. And the production of ethanol uses a great
deal of energy. So why is the ethanol industry pushing
this? Because it has a massive supply of ethanol and
not enough demand for it. There is no natural market
demand for this. Without a government mandate
for more ethanol, more ethanol wont get sold.
Aldermen, really. Why would you want to prop up an
industry by creating a risk for your constituents? Stop
this ordinance once and for all.
Page 11
Potential Vehicle Damage

The reasons for this view are pretty straight-forward which weve underscored recently with a dash of humor:
Potential vehicle damage Research has shown E15 could damage engines and fuel systems in millions of vehicles on
the road today. Automakers have warned that using E15 in vehicles that werent designed to use it could void warranties.
The real-world impacts of pushing more E15 into the

fuel supply could fall on consumers and the broader
economy, according to a NERA Economic Consulting
study. If Chicago imposes the E15 proposal, it could
impact small businesses that own a number of the
citys service stations. One owner, Russell Garcia,
made the point in a letter to the editor of the Tribune
in October:

The idea of mandating the sale of E15 gasoline in

Chicago is poor public policy. (M)y businesses
would be negatively impacted by this mandate, and
my customers would be harmed too. E15 provides
no cost savings. While E15 has a sticker price that is
about the same as traditional gasoline, its poorer gas
mileage makes it more expensive. Plus, the cost of
retrofitting new underground tanks at my stations and
my competitors would necessitate even higher gas
prices.
Page 12
Potential Vehicle Damage (continued)

Refueler, beware E15 also poses potential risks in a number of other areas. For example, if you own a gasoline-powered leaf
blower or a snowmobile.

Page 13
Potential Vehicle Damage (continued)

Refueler, beware E15 also poses potential risks in a number of other areas. For example, if you own a gasoline-powered
snowmobile.
The point being that E15 could foul up engines in all

kinds of outdoor equipment. As the Tribune editorial
noted:
The biggest risk comes if equipment is stored for the
season with fuel still in the tank. Ethanol tends to make
rubber and plastic parts more brittle. Ethanol attracts
water, which can increase corrosion in moving parts.
A long winter in contact with this mix can compromise
the equipment.Higher concentrations of ethanol in fuel
can make small engines run hotter, which in turn can
cause malfunctions. Many manufacturers of outdoor
power equipment will not honor warranties if owners
use E15 fuel. They strongly oppose diluting gasoline
with more ethanol.

E15 also poses potential risks for marine engines and

motorcycles.
The Tribune is right: Chicago officials should kill this
proposal once and for all.
Source: http://www.filluponfacts.com/#/?section=e15inchicago
Page 14
Chain Restaurants on the RFS Ethanol Mandate
Source: #ReapealtheRFS - http://bit.ly/1daq9Wk
U.S. policy on biofuels, and on corn ethanol in particular,

is a widely-recognized contributor to food price
inflation. Experts from across the political spectrum
now recognize this fact, and many are now calling for
an end to Federal subsidies and supports for the corn
ethanol industry. Although NCCR continues to support
incentives for advanced biofuels, such as cellulosic
and others that hold promise for a future of greater
U.S. energy independence, we oppose continuation
of subsidies and supports for the mature corn ethanol
industry. NCCR
Through years of promoting ethanol as a solution to

Americas energy issues, Congress has unknowingly
worked to increase commodity prices on retailers
throughout the supply chain. These subsidies have
artificially increased the price of corn, which in turn has
driven up costs for restaurants and the customers they
serve. Rob Green, NCCR executive director
We estimate the impact of the 2015 RFS mandates
at 2011 levels of food purchases under two scenarios
For the average quick service restaurant, these
input cost increases are the equivalent to $18,190 per
restaurant in the first scenario and $2,894 per restaurant
in the second scenario. For the average full service
restaurant, the cost increases are $17,195 and $2,736

per restaurant, respectively. PwC report for NCCR
Ethanol diverts a significant share of the US corn crop

each year. And, by doing so, it makes corn prices higher
than they otherwise would be. University of Missouri
economist Pat Westhoff, via VOA News
The use of corn-based ethanol required by the federal

Renewable Fuel Standard mandate has dramatically
distorted the market and increased costs throughout the
food supply chain. The RFS has had an adverse effect
on the chain restaurant industry, which has witnessed
marked increases in commodity prices and associated
costs to the tune of billions of dollars a year.
Rob Green, NCCR executive director
Chain restaurants arent all mega-corporations. Many
are systems of small business franchises like the one
my family owns. The government picked winners
and losers when they passed the RFS mandate.
This mandate is costing me $20,000 to $30,000 per
restaurant. It is blatantly unfair and we urge Congress to
repeal it. Ed Anderson, Wendys franchise owner and
NCCR member.
Page 15
The RFS and Outdoor Power Equipment
Source: #ReapealtheRFS - http://bit.ly/1b3eUeC
Our interest is to protect the consumer; were trying

to prevent the harm from happening in the first place.
EPA has acknowledged there will be mis-fueling
with E15; there will be engine and product failure.This
is the reason the outdoor power equipment, boating,
UTV, snowmobile, auto, and motorcycle industries, as
well as the American Automobile Association (AAA) and
the Coast Guard, oppose this higher ethanol fuel. Our
interest is in protecting our customers.
OPEI President and CEO Kris Kiser
Will this damage my lawnmower, boat, jet ski,
snowmobile, or four-wheeler?
It sure will if you dont pay attention. Generally, small
engines are not designed to deal with the more
corrosive E15 blend. And, as we mentioned in 2010,
ethanol forms a brown goo when left in a fuel tank
too long, which can clog fuel-system components.
Two-stroke engines run hotter with an ethanol blend,
which accelerates the potential damage. And ethanol
can wreak havoc on fiberglass fuel tanks in older
boats. Groups like the National Marine Manufacturers
Association and Outdoor Power Equipment Institute
have issued strong warnings to consumers to pay
attention to their fuels or risk severe engine damage. Use

a fuel stabilizer if the engine will sit for more than a few
weeks without use; this will reduce the ethanolwater
separation and potential gumming issues. Be careful
to avoid using E15 in uncertified engines like these, at
least until the subject is studied more thoroughly, and the
engineering catches up to the fuel. Popular Mechanics
Are higher ethanol blends really that harmful to
outdoor power equipment?
Yes. You might be tempted to use a higher ethanol
blended fuel since it may be less expensive. However,
greater than 10 percent ethanol in outdoor power
equipment can corrode metals and rubber and cause
engines to break down more quickly. Most outdoor
power equipment was not built, designed or warranted
to run on fuel greater than E10, and using higher ethanol
blends can damage or destroy it. In fact, using any fuel
that contains more than 10 percent ethanol is illegal to
use in outdoor power equipment.
Also, the higher the ethanol blend, the lower the fuel
economy. Ethanol contains 33 percent less energy
per gallon than gasoline, so engines fueled with higher
Page 16
The RFS and Outdoor Power Equipment (continued)
Source: #E15 - http://1.usa.gov/1bgNwfo
ethanol blended gas will attain fewer miles per gallon than
those running on conventional gasoline (E10). This means
you must fill your gas tank more frequently when using
higher ethanol blended fuel. OPEI
The higher the ethanol content, the more acute the

effects. OPEI
Manufacturers of outdoor power equipment and their
engines say they will not honor the warranty of a product
someone has been running with E15. The reason?
Besides the above effects of ethanol, engines running
even E10 gasoline run hotter. And with E15, the results
can be dangerous, considering reports of unintentional
clutch engagementsuch as a powered-up chain
saw that suddenly decides, because its running so
hot, that youve pressed the button to start the chain.
Manufacturers see a train wreck coming because their
customers will ultimately blame them for problems.
Consumer Reports.org

E15 is universally opposed by our entire industry

because of the problems it causes. Research has
shown that using E15 can have harmful and costly
consequences on small engines and outdoor power
equipment. Most engines would have great difficulty in
meeting both emissions and performance expectations
with this type of alcohol range. Most gas stations have
tanks where the supplier puts the mixed gasoline into the
storage tank and the pump pumps it up. Because alcohol
separates from gasoline, consumers can get a higher mix
of alcohol in their fuel. If you increase to 15%, the effect
gets multiplied, so you might end up with double the
alcohol you expected. Thats a problem. Brad Murphy
of OPEI member Subaru Industrial Power Products.
Page 17
The National Turkey Foundation on the RFS
Source: #ReapealtheRFS - http://bit.ly/17DKm4D
Feed corn prices increase the cost of raising turkeys and

other meat protein animals we raise for food. Consumers
ultimately pay more for these added costs of raising meat
and poultry. NTF
value relative to gasoline, not a corn price that is both

inflated and destabilized by the inflexible RFS. As corn is
syphoned off to ethanol, animal agriculture is losing jobs in
rural America.
Consumers have seen food prices increase faster than

general inflation since the current RFS was enacted in
2007. Food affordability, which had been improving for
decades, now is deteriorating.
The National Turkey Federation encourages pointed

discussion of the RFS. Animal agriculture has long been
suffering at the hand of this broken policy, especially
feed costs in the turkey business. The RFS has caused
an increase of $1.9 billion in feed cost alone for turkey
farmers, as corn continues to be syphoned off to
ethanol.
We saw how price spikes caused by this government

mandate impacts turkey growers when corn prices
reached almost $8 per bushel: U.S. turkey production
declined by 9 percent, resulting in loss of rural jobs.
Corn is the major ingredient in turkey feed and almost
all livestock and poultry. Corn is the primary reason why
one turkey company went bankrupt in 2012 and why the
industry already has lost 750 jobs in the last 12 months.
The RFS has destabilized corn and ethanol prices by

offering an almost risk-free demand volume guarantee
to the corn-based ethanol industry. Domestic and export
corn users other than ethanol producers have been
forced to bear a disproportionate share of market and
price risk. Ethanol prices should reflect the fuels energy
RFS has been such a poorly managed mess, its time to

drain the swamp. The RFS needs a fresh start in order to
put in place a smarter policy on the mix of fuel and feed.

Joel Brandenberger, NTF President
Its safe to say RFS is hitting consumers, poultry
producers, and farmers squarely in the pocketbook.

Dr. Thomas Elam, president of FarmEcon, LLC,
speaking on behalf of the NTF and the National Chicken
Council
Page 18
E15 - A Bumpy Ride for Motorcyclists
Source: #ReapealtheRFS - http://bit.ly/1bWk7De
Thanks to the U.S. Environmental Protection Agency,

theres a new threat facing motorcyclists nationwide, and
possibly all Americans. The danger is posed by a certain
blend of motor vehicle fuel called E15, which may damage
the engines of motorcycles, all-terrain vehicles, boats and
powered equipment. Wayne Allard, AMA vice president
for government relations
E15 could lower fuel efficiency and possibly cause
premature engine failure for motorcycles and ATVs.
AMA
the U.S. Environmental Protection Agencys decision
to allow E15 into the marketplace would impact every
American who owns motorcycles and ATVs, not to
mention cars, lawnmowers, boats and snowmobiles.
AMA
the U.S. Department of Agriculture was subsidizing
ethanol production from the start by providing grants to
purchase special ethanol blender pumps. Agriculture
Secretary Tom Vilsack announced in 2011 that the
USDA intends to install 10,000 blender pumps by 2016.
[Rural Energy for America Program] REAP will be a key
component to achieve the secretarys goal and, thus, help
grow the availability of E15 fuel. These special ethanol

blender pumps will further limit access to E10-or-less
fuel in rural areas. This will be a problem because rural
areas tend to have an older legacy vehicle fleet than
other parts of the country. Moreover, rural areas are the
most vulnerable places for motorcyclists and users of
small engine devices because options for regular gasoline
may be few or even non-existent. The REAP will help
one segment of the rural economy at the cost of other
segments. Ultimately, the higher costs will have a negative
impact on small rural economies. AMA
Automobile and motorcycle manufacturers must certify
that the on-highway vehicles they produce will meet
applicable U.S. EPA and National Highway Traffic Safety
Administration emissions, fuel economy and safety
requirements prior to selling the vehicles. The fuel that
the vehicles must use for this requirement is called the
certification fuel. Changing the certification fuel to E15
or E30 is at odds with the 22 million motorcycles and
all-terrain vehicles currently in use, not to mention the
legacy fleet of cars, boats, lawnmowers, generators
and hundreds of millions of small engines in commerce
today. None of these vehicles and engines is designed to
operate on fuel with more than 10 percent ethanol. AMA
Page 19
E15 - A Bumpy Ride for Motorcyclists (continued)
in use, not to mention the legacy fleet of cars, boats,

lawnmowers, generators and hundreds of millions of
small engines in commerce today. None of these vehicles
and engines is designed to operate on fuel with more
than 10 percent ethanol. AMA
When you have a type of fuel that, if inadvertently used,

has the potential to damage engines and fuel systems
and void a manufacturers new-vehicle warranty, you
really should move with caution when it comes to putting
that fuel in the marketplace. Issuing rules that allow the
sale of E15 at gas stations without adequate testing to
be sure its safe in motorcycles and ATVs, not to mention
engines in boats and power equipment, just isnt wise.
AMA Board Chairman Maggie McNally

100 percent of the 22 million motorcycles and all-terrain

vehicles on the road and trail in the U.S. today are not
designed to run ethanol blends higher than 10 percent,
and many older machines favored by vintage enthusiasts
have problems with any ethanol in the fuel. And yet the
opportunity to misfuel and damage an engine with higher
ethanol blends such as E15 is very real. It is time to set
the record straight.
The bottom line for the AMA is this: Motorcyclists simply
want safe fuels available at all fuel retailers and measures
employed by retailers to ensure they cannot inadvertently
put unsafe fuels in their tanks. AMA
It really doesnt do much good to have laws and rules

telling refiners to create volumes of ethanol-gasoline
blends that consumers wont buy. Wayne Allard, AMA
vice president for government relations
Page 20
RFS Ethanol Mandates a Kitchen Table Issue
Restoring the
balance between
food and fuel crops
is long overdue.
ABA President & CEO Robb MacKie
As American consumers continue to cope with a

period of pro-longed economic turmoil, and U.S. food,
beverage and consumer products makers from farm
to fork struggle with record high commodity prices, we
believe it is EPAs duty to grant a waiver for the applicable
volume of corn ethanol required by the RFS.
Congress should adopt an energy policy that, while

promoting sustainable, domestic, and affordable energy
sources, does not lead unnecessarily to increased food
prices.
In total, corn is used in 75 percent of the food on
supermarket shelves. Losses in grain yields, therefore,
have a severe impact on U.S. food production for both
domestic consumption and exports such as corn,
soybean, and meat products.
Its not just corn food-to-fuel policies create a ripple

effect for all agricultural products, also increasing prices
for basic staples like bread, eggs and milk.
corn usage. Conversely, high biofuels mandates create

inflexibility in markets, the study says, and any required
adjustment in demand (for corn) would occur outside the
ethanol industry (e.g., feed, livestock/poultry, food).
American Meat Institute
The corn-based ethanol mandate impacts the baking
industry twofold: First, the government mandate to
grow corn for fuel instead of food drives farmers to move
away from planting wheat; second, the wheat market
typically follows the much larger corn market, and when
corn prices rise due to government created demand for
ethanol, wheat prices rise as well. With an estimated 40
percent of the corn crop needed to satiate demand for
the corn-based ethanol mandate, there is little doubt that
the mandate impacts corn prices and supplies, which
will also impact the wheat market. ABA once again calls
on Congress to stand with consumers and repeal the
corn-based ethanol mandate.
- American Bakers Association (ABA) President & CEO
Robb MacKie
[W]ithout a high biofuels mandate, the market more

easily adjusts to short-supply situations because ethanol
producers will, at some corn-price level, also reduce
Page 21
RFS Ethanol Mandates a Kitchen Table Issue (continued)
Restoring the
balance between
food and fuel crops
is long overdue.
ABA President & CEO Robb MacKie
Due to the 2005 and 2007 corn-based ethanol

mandates, wheat could not (and cannot) compete
for finite acreage against other biofuel crops. With the
addition of E15, estimates show that corn acreage may
need to increase to as much as 110 million acres in order
to meet demand. With increasing ethanol mandates due
to the RFS2, and with the inability of second generation
biofuels to come online quickly to relieve pressure on the
demand for corn-based ethanol, corn will continue to win
the battle over finite farmland in the and drive food prices
both domestically and internationally Comments to the
House Energy and Commerce Committee

The corn-based ethanol program and the Renewable

Fuel Standard (RFS) continue taking their toll on the
baking industry and consumers. Corn-based ethanol
has accelerated the decrease of wheat acreage in the
U.S. over the past 30 years and tightened food supplies
around the world. ABA President & CEO Robb MacKie
Page 22
Rising Ethanol Blends Dont Float All Boats
With nearly 13 million registered boats (and nearly

16 million boats in the field) and 70 million boaters
nationwide, the recreational marine industry is a major
consumer goods and services industry that contributed
$30.5 billion in new retail sales and services to the U.S.
economy in 2009 and generates nearly 340,000 jobs
nationwide. NMMA strongly opposed and continues
to oppose the granting of a partial or conditional
waiver for E15 or any other ethanol blend level over
ten percent ethanol (E10) because it will substantially
increase public confusion and lead to persistent misfueling
and consequent engine performance failures, emissions
control failures, and consumer safety concerns.
NMMA Comments to the U.S. Environmental Protection
Agency
The Department of Energys National Renewable Energy
Laboratory has tested the effects of E15 gasoline on
some standard marine engines, and the majority of these
engines suffered significant damage or exhibited poor
engine runability, performance, and difficult starting none
of which is acceptable on a boat at sea.
NMMA Letter
we have determined that e15 blends of ethanol would

cause considerable damage to the 7.5 million outboard
engines in use in this country today. This damage is
unnecessary and can be avoided by freezing the ethanol
content of gasoline at 10% by volume. NMMA has never
been anti-ethanol. We are simply opposed to fuel blends
that will ruin our engines and place lives at risk.
Thomas J. Dammrich, President NMMA
There is a significant amount of technical and anecdotal
information that concludes that the introduction of
E10 into the gasoline supply has caused significant
damage and failure to boats. Although boat and engine
manufacturers have adjusted and now design equipment
to run on E10, the introduction of E15 will result in:
Damage to rubber parts;
water contamination in the fuel system due to
ethanols hygroscopic properties;
increased water absorption and phase-separation of
gasoline and water while in tank;
corrosion of fuel system components and fuel tanks;
higher exhaust gas temperature due to enleanment;

Page 23
Rising Ethanol Blends Dont Float All Boats (continued)
Source: #ReapealtheRFS - http://bit.ly/1aKg5A
performance issues, such as drivability

(i.e. starting, stalling, fuel vapor lock);
damage to valves, push rods, rubber fuel lines and
gaskets.
Minnesota Testimony, NMMA
Currently, there are nearly 13 million registered recreational
boats in operation in the U.S. No gasoline marine engine
or any other marine equipment including gasoline
generators currently in the field was designed,
calibrated, certified or is warranted to run on anything
over 10 percent ethanol.
The Renewable Fuels Standard must be revised to

prevent the damage that ethanol blends above the 10%
level will cause to engines of all types. Unless the
renewable fuels mandate is changed, it is likely that EPA
would require 35%-40% ethanol in gasoline by the year
2022. Every time EPA changes the percentage of ethanol
in gasoline, engines have to be recalibrated and engine
designs changed. NMMA Policy Brief
EPAs own engineering judgment, as well as all available

data (supported by these two new studies), strongly
suggests that all of the 12.8 million registered boats on the
water today (with the exception of approximately 260,000
diesel-powered boats and the roughly 430,000 registered
non-motorized craft) may be negatively impacted by any
gasoline with more than a 10 percent ethanol blend.
NMMA Petition to EPA

Page 24
Resources
1
NERA Economic Consulting, Economic Impacts Resulting from Implementation of RFS2 Program http://bit.ly/12dJD2j
Coordinating Research Council, Intermediate-Level Ethanol Blends Engine Durability Study http://bit.ly/12dCjS0
Coordinating Research Council, Durability of Fuel Pumps and Fuel Level Senders in Neat and Aggressive E15
http://bit.ly/12dCHju
Rep. Sensenbrenner, E15 Automaker Responses http://1.usa.gov/12dCSLJ
AAA, New E15 Gasoline May Damage Vehicles and Cause Consumer Confusion http://bit.ly/12dCZqw
Environmental Working Group, Senators Seek to Block Higher Ethanol Blend http://bit.ly/12dD5yw
National Academy of Sciences, Potential Economic and Environmental Effects of U.S. Biofuel Policy http://bit.ly/12dF0TL
Stanford University, Center for Food Security and the Environment http://stanford.io/12dFfOO
Food and Agriculture Organization of the United Nations, OECD-FAO Agricultural Outlook 2012-2021
http://bit.ly/12dFk51
10
World Bank Policy Research http://go.worldbank.org/QPII43RIJ0
11
Schornagela, Niele, Worrell, and Bggemann, Resources, Conservation and Recycling; Water accounting for (agro)
industrial operations and its application to energy pathways, December 2011. www.elsevier.com/locate/resconrec
12
The National Academy of Sciences, Potential Economic and Environmental Effects of U.S. Biofuel Policy
http://1.usa.gov/12dFt8l
13
Energy Tomorrow, Bob Greco Blog http://bit.ly/17JzgbE
14
Energy Tomorrow Blog, Mark Green, The RFS is Broken http://bit.ly/1997VzZ
15
Energy and Power Subcommittee, House Committee on Energy and Commerce, Overview of the Renewable Fuel
Standard: Government Perspectives, June 2013 http://1.usa.gov/1e3OKIU
16
Fill Up On Facts http://filluponfacts.com/

Page 25
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Renewable Fuel Standard

Americas Oil and Natural Gas Industry

For the latest report, please visit www.api.org/policy-and-issues/fuels and

The Renewable Fuel Standard:

What is the RFS?

Biomass Based Diesel:

Advanced Cellulosic Biofuel

Conventional Renewable Fuel Corn Ethanol

60% GHC Reduction

20% GHC Reduction (For new construction only.

Standalone Renewable Diesel

Co-processed Renewable Diesel

20% GHC Reduction

20% GHC Reduction

Existing corn facilities grandfathered.)

Source: EPA. Visit: http://www.epa.gov/otaq/renewablefuels/420f10007.pdf

The Energy Independence and Security Act of 2007

The Renewable Fuel Standard:

Petroleum refiners and importers then must acquire

Problems with Predicting Demand

hundred billion gallons per year

Actual and 2014 Projected

EISA07 was based on significantly greater gasoline

The Renewable Fuel Standard:

Declining gasoline demand, combined with increasing

Problems with Predicting Supply

million barrels per day

Actual and 2014 Forecast

Gross Imports Crude

million barrels per day

Actual and 2014 Forecast

EISA07 also assumed declining domestic production of

North American energy production the U.S. is now the

Problems with Choosing Technologies

Actual Production (through end July 2013)

Contrary to claims, the EPA mandate for increased use

May 2014 to 810,185 gallons to reflect actual supply. In

A total of 20,000 gallons were produced in 2012, but it

The Renewable Fuel Standard:

What is the Blend Wall?

As biofuel mandates increase, the ethanol volume

The Renewable Fuel Standard:

waived notwithstanding EIAs optimistic projections

Running Up Against the Blend Wall

Economic Harm in 2015

Renewable Volume Obligation

$770 billion decrease in GDP

Cycle RepeatsEconomic Harm Intensifies

Individual OPs reduce

When the Blend Wall is

A study by NERA Economic Consulting buttresses the

The Renewable Fuel Standard:

Lead to fuel supply disruptions that ripple adversely

E15 and Your Car

Vehicle Manufacturers and E15

Source: http://www.edmunds.com/ownership/howto/articles/120189/article.html and auto company contacts

Not Chevrolet City Express

Not xB, FRS