Subject: Biobutanol and Access to Fuels Market – Request for Immediate Relief
The Clean Air Act requires EPA to register a fuel or fuel additive once all the applicable registration requirements have been met by the manufacturer. While Isobutanol has been approved for blending up to 12.5 volume percent under specific conditions for many years, EPA’s recent approval (a letter of notification (PDF)) of the additive up to 16 percent by volume have, by the Agency’s own acknowledgment, resulted in “…… the potential for the widespread introduction of isobutanol into commerce……” This potential is, however, limited by a number of outdated and unnecessarily restrictive regulations which can significantly impair the potential for this valuable additive to realize it’s market value and potential.
With this registration, isobutanol can be used as a gasoline additive or a “drop-in” fuel. Bio-isobutanol, which is produced from renewable resources like corn and other agricultural feedstocks, can reduce greenhouse gas emissions, and is therefore eligible to generate credits, in some cases advanced credits, under the Renewable Fuel Standard (RFS) program. Parties required to meet the RFS Volume Obligations (RVO) are interested in cost effective and practical alternatives to satisfy the standards and meet unmet performance needs of the vehicles and engines. Biobutanol is one potentially attractive option because of its high energy density, low blending vapor pressure, and low heat of vaporization. There are other blending and distribution qualities that also make bio-isobutanol desirable in the transportation fuels market.
While the demand is there, realizing the potential will require additional steps be taken to allow the market the flexibility to make the choice to introduce biobutanol into the fuel pool mix. Such steps include either modifying current outdated regulatory requirements or alternatively addressing such regulatory impediments administratively until such regulatory modifications can be completed. It is particularly important for small businesses that are allowed certain exemptions from applicable testing requirements see these changes made quickly.
The following are several examples where immediate administrative relief is necessary and expeditious regulatory reform be the goal:
First, as you know, any gasoline blendstock created for the for purposes of blending ethanol may also work with isobutanol. Current regulations require that the oxygenate for blending purposes be listed on the “Product Transfer Document” (PTD) when shipped from the refinery. Given the federal renewable fuel standard requirement and the market availability of ethanol, virtually all refiners list “ethanol” on the PTD, and hence only ethanol can be used with that gasoline blendstock. Hence, for RBOB or CBOB stored in a common tank only ethanol can be used for blending with the fuel in that tank effectively shutting other potential qualifying oxygenates from being able to sell in the market. Unless restrictions are lifted, or other allowances are made, this means separate tankage and infrastructure is necessary for any market to form, which is cost prohibitive.
Second, as you know, under the Clean Air Act authority, ethanol is granted a 1 psi Reid vapor pressure increase for gasoline blended at 10 volume percent ethanol in the summer months. In setting the specification for gasoline volatility and gasoline blendstocks, the EPA did not consider that other oxygenates, like isobutanol that do not have a vapor pressure issue, might become commercially available and that the more restrictive RVP standards that apply to non-ethanol blended gasoline would ultimately be impeded market access not because they can’t meet the stricter RVP standards, but because the resulting co-mingling of the two blends would not be in compliance with the volatility standards due to the ethanol portion of the blends. Isobutanol’s favorable properties and resulting blended properties results in a lower vapor pressure gasoline product when compared to gasoline ethanol only blends, and lowers the volatility of gasoline ethanol blends when they are comingled in the market. Removing the downstream co-mingling restrictions will result not only in greater market access and choice, but also creates the potential for environmental benefits due to the lower volatility of the product.
Finally, current EPA regulations do not allow an isobutanol blended gasoline to be mixed into a tank that previously held or currently contains ethanol blended gasoline unless the tank is completely emptied. This significantly hinders access to retail markets because this restriction ultimately requires the addition of new tanks for storage, which is cost prohibitive. These restrictions make it impossible for a retailer to effectively use isobutanol containing gasoline. Isobutanol blended gasoline can meet the specifications for the retail market, just as ethanol containing gasoline. However, in switching over to an IBA blended gasoline, a retailer would need to run the ethanol blended tank of gasoline to an impractical level, albeit still leaving a “heel” left in the tank. Following this draw down, the isobutanol gasoline blend should then be able to be put into the tank. However, this is not allowed given the way the current EPA regulations are written. The consequence is that it restricts the market’s ability to practically, cost effectively and regulatorily make the transition, limiting flexibility and marketplace choice. Taking immediate administrative action to allow for this practice would make it possible for this transition to occur.
These and other current restrictions are no longer necessary nor justifiable. There aren’t any environmental concerns associated with adopting these changes nor will they result in any downstream / supply chain issues. The Agency should move to address these outdated restrictions expeditiously to allow the market to make the most cost-effective choices, broadly benefiting the market through greater product choice, flexibility and consumer choice. Addressing these issues are possible in the near term through Agency administrative discretion and over the long term through rule making modifications.