Implications of the CARB Ethanol Ruling

Submitted by R-Squared Energy Blog

A number of people have written or commented regarding the California Air Resources Board (CARB) ruling that is expected on ethanol later this week. Treehugger had the story:

Corn Ethanol Worse than Oil? California Rules Yes

In what would certainly be a huge blow to the US’ formidable corn-ethanol industry, the California Air Resources Board is readying a report that says ethanol is worse than oil in terms of greenhouse gas emissions. According to the Daily Climate, the California regulators are prepared to go as far as to declare that biofuels cannot help the state fight climate change-could this be the beginning of the end for ethanol?

So, what does this mean? The article above has a different interpretation than my own:

What’s especially interesting about all this, however, is that such a groundbreaking finding will probably have a major impact at the national level as well: Obama is leaning towards establishing a national emissions standard, so California’s report is bound to form something of a precedent. Which spells bad news for the corn industry.

My own interpretation comes from a previous CARB ruling that had zero impact on what the EPA ultimately decided to do. This one is from 2005:

Senator Feinstein Renews Call for Federal Oxygenate Waiver for California

The California Air Resource Board (CARB) researched this issue at length and found that ethanol-blended gasoline does not help California meet the goals of the Clean Air Act as it relates to reducing ozone formation, particularly during the summertime, and, in fact, ethanol actually increases the emission of pollutants that cause ozone during the summer months.

In September 2004, CARB sponsored a study by the Coordinating Research Council (CRC). The CRC issued a report entitled Fuel Permeation From Automotive Systems. The study was designed to determine the magnitude of the permeation differences between three fuels, containing MTBE, ethanol, or no oxygenate, in the selected test fleet. The study found that emissions increased on all 10 vehicle fuel systems studied when ethanol replaced the MTBE. In fact, the ethanol blended gasoline caused emissions to increase by 65% when compared with MTBE blended gasoline, and by 45% when compared with non-oxygenated gasoline.

In a November 2004 report, CARB staff issued a preliminary analysis of increased emissions due to ethanol blended gasoline. The staff reported that “on-road vehicles hydrocarbon emissions increase[d] by 40-50 tons/day, statewide, [in] 2004.” CARB staff is currently working on a final analysis of the impact of ethanol blended gasoline on emissions.

So what happened? The EPA said “too bad.”

EPA Upholds Reformulated Gas Requirement in California, New York, and Connecticut

On June 2, 2005, EPA denied requests made by the states of California, Connecticut and New York for a waiver of the oxygen content requirement of the RFG program. The Clean Air Act includes specific guidelines for when EPA may grant a waiver from the Congressional mandate that RFG contain oxygen. States must provide to EPA clear evidence that the oxygen content requirement will prevent or interfere with their ability to meet the National Ambient Air Quality Standards (NAAQS). EPA determined that the petitions submitted by California, Connecticut and New York fail to meet the waiver requirements outlined in the Clean Air Act.

If the previous ruling was that California didn’t have good enough evidence to warrant the waiver (and last time they had lab data in hand), I don’t see any way that they are going to get any slack this time. My prediction is that this won’t have any impact on the ethanol mandates. It might slow down a rush to increase the percentage of ethanol allowed in gasoline (ethanol proponents want to see this ramped up to 15%, and that might be a tougher sell now).

As expected, the Renewable Fuel Association took exception to CARB’s findings, presenting a 117-page document that disputes the ruling. I have not had time to browse through the document, and present it here merely for information.

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