Policy Documents

Research & Commentary: E15 and Ohio

December 6, 2013

Ohio currently does not require gasoline be blended with renewable fuel, but ethanol is still frequently blended with the state’s motor gasoline in compliance with the federal Renewable Fuel Standard (RFS), which mandates 36 billion gallons of renewable fuel—primarily ethanol—be blended into gasoline and diesel fuel by 2022. Since Ohioans are relatively large users of motor gasoline, they should know the risks and limitations of ethanol use.

James M. Taylor, senior fellow for environmental policy at The Heartland Institute, explains, “For vehicle owners, ethanol raises fuel costs and delivers lower mileage. For food consumers, ethanol raises food prices by unnecessarily diverting much of the nation’s food supply to fuel. For ranchers, ethanol raises livestock feed costs. For environmentalists, ethanol production uses exorbitant amounts of water, encourages the development of marginal crop lands that would otherwise be left in a more natural state, and provides no net emissions benefits.” Such problems are among the major reasons the U.S. Environmental Protection Agency recently reduced its ethanol mandate for 2014, dropping it from 18.15 billion gallons to about 15 billion gallons.

In particular, gasoline with 15 percent ethanol content by volume, or E15, has been shown to damage engines, disable dashboard indicators, and void vehicle warranties. A recent statement from the American Automobile Association (AAA) explains, “More than 90 percent of the vehicles on the road today are not approved by manufacturers to use E15, including most 2001–2013 models.” AAA also has warned its members that using E15 can cause engine damage and void the vehicle’s warranty.

Consumers do not benefit from mandates and subsidies, despite the ethanol industry’s claim that such preferences are needed to level the playing field with oil subsidies. The proper legislative response, according to the Cato Institute’s Jerry Taylor and Peter Van Doren, should be to “eliminate the objectionable subsidy, not impose a countervailing subsidy.”

A proactive solution to the problems caused by E10 and E15 would be further reductions in the federal ethanol mandate, culminating in its total elimination. If blended fuels have any economic and environmental merit, competition and consumer choice will recognize it much faster and more accurately than any government institution can do.

The following documents provide additional information about E15.

 

Ten Principles of Energy Policy
http://heartland.org/policy-documents/ten-principles-energy-policy
Heartland Institute President Joseph Bast outlines the ten most important principles for policymakers confronting energy issues, providing guidance to help deal with ongoing changes in markets, technology, and policies adopted in other states, supported by a thorough bibliography. 

Research & Commentary: Renewable Fuel Standard
http://heartland.org/policy-documents/research-commentary-renewable-fuel-standard
A federal law requiring 36 billion gallons of renewable fuel be blended into gasoline and diesel fuel by 2022 has backfired in many ways, observes Heartland Institute Policy Analyst Taylor Smith. Ethanol’s lower energy density, higher price, and heavy land use mean blended fuels such as E15 actually cost consumers more while providing no reduction of carbon dioxide emissions or oil imports. 

Ethanol
http://www.fueleconomy.gov/feg/ethanol.shtml
The U.S. Department of Energy defines ethanol and states what the department considers to be the advantages and disadvantages of blending it with motor fuel gasoline. 

Study: E15 Causes Engine Damage to Automobiles
http://news.heartland.org/newspaper-article/2013/03/08/study-e15-causes-engine-damage-automobiles
Environment & Climate News reports on a study by the nonprofit Coordinating Research Council that found the 15 percent ethanol blend, known as E15, damages engine valves and other engine parts in many popular automobiles and light trucks. The CRC study also found results similar to the American Petroleum Institute’s observations E10 or E15 can damage fuel systems, check-engine lights, and fuel-level indicators. The American Automobile Association posits E15 can void the vehicle’s warranty, the story reports. 

Biofuel’s Carbon Balance: Doubts, Certainties and Implications
http://heartland.org/policy-documents/biofuels-carbon-balance-doubts-certainties-and-implications
In a September 2, 2013 paper published in Climatic Change, University of Michigan professor John M. DeCicco reports biofuels such as ethanol produce no climate benefit at any stage in their development or use. For example, at the tailpipe, burning ethanol releases approximately the same amount of carbon dioxide as burning gasoline. At the cornfield, removing corn from the ground to use it for fuel adds CO2 to the air by taking away a plant that would otherwise be removing CO2 from the air via photosynthesis. 

MIT Study: Ethanol Doesn’t Reduce Gasoline Prices
http://news.heartland.org/newspaper-article/2012/09/12/mit-study-ethanol-doesnt-reduce-gasoline-prices
Claims from the ethanol industry that ethanol blending reduces gasoline prices are contradicted by economics professors at the Massachusetts Institute of Technology, who conclude ethanol has no such effect. Moreover, the MIT professors note ethanol contains 33 percent less energy than gasoline, so engines need more of it to power a vehicle the same distance. 

Challenges to the Transportation, Sale, and Use of Intermediate Ethanol Blends
http://www.gao.gov/products/GAO-11-513
The U.S. Government Accountability Office reports a federally funded study found the effect of ethanol-blended gasoline was to “reduce a vehicle’s fuel economy (i.e., fewer miles per gallon) and may cause older automobiles to experience higher emissions of some pollutants and higher catalyst temperatures.” 

The Ethanol Boondoggle
http://heartland.org/policy-documents/ethanol-boondoggle
In a January 21, 2007 paper for the Milken Institute Review, Cato Institute Senior Fellows Jerry Taylor and Peter Van Doren explain why none of the five most common arguments in favor of ethanol subsidies stand up to scrutiny. 

Consumer Reports: Warranties Void on Cars Burning E15, Say Automakers
http://www.consumerreports.org/cro/news/2011/07/warranties-void-on-cars-burning-e15-say-automakers/index.htm
This July 2007 Consumer Reports article notes EPA would finalize a label warning gasoline customers to pump E15 fuel only into models 2001 or newer. Shortly after, nine automakers—including Chrysler, General Motors, and Toyota—wrote to Congress stating they would not honor warranties for older cars using E15, leaving owners of newer cars out of warranty concerned they will be stuck with the higher repair costs as a result of E15. 

Statement by Bob Darbelnet, President and CEO of AAA
http://www.noodls.com/view/2E4304430B831627651463636D1DA594A046DDA4
The American Automobile Association released a statement on November 15, 2013 in response to the U.S. Environmental Protection Agency’s proposal to decrease ethanol requirements in gasoline. 

How Much Ethanol Is in Gasoline and How Does It Affect Fuel Economy?
http://205.254.135.7/tools/faqs/faq.cfm?id=27&t=10
The U.S. Energy Information Administration answers this “Frequently Asked Question” about ethanol and fuel economy. According to the EIA, in 2012 approximately 134 billion gallons of gasoline were used in the United States, and this fuel contained about 13 billion gallons of ethanol.

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Environment & Climate News Web site at http://news.heartland.org/energy-and-environment, The Heartland Institute’s Web site at http://www.heartland.org, and PolicyBot, Heartland’s free online research database, at www.policybot.org.

If you have any questions about this issue or The Heartland Institute, contact Heartland Institute Policy Analyst Taylor Smith at tsmith@heartland.org or 312/377-4000.