In order to reduce emissions, all gasoline in the US is blended with 5% to 10% ethanol, but with the increasing fuel-economy of the light vehicle fleet, petroleum companies are feeling the pinch.
When consumers buy ethanol-blended gasoline, E5 or E10 [5% and 10%, respectively], only 90% to 95% of that ever trickles back to the petroleum companies. Because the US Environmental Protection Agency [EPA] mandated it, petroleum companies have had to bear with it, but a recent change in ethanol blending regulation has petroleum refiners up at arms.
The EPA has approved E15 [15% ethanol blend] for “use in all engines newer than model year 2000,” in spite of the fact that no automakers have approved it for vehicles older than model year 2013. Every automaker except for Porsche has said their warranty programs will not cover damage to the engine and fuel system caused by the use of E15, which leaves about 5% of vehicles on the road that actually support the new blend. Consumers would have to buy a 2013+ vehicle, or a 2000+ Porsche, if they don’t want to run into warranty problems. On a side note, Brazil has been running on ethanol since the 1930s and is now up to 25%.
Refiners, on the other hand, are lobbying for the EPA to reverse the E15 standard. If E10 cuts into Exxon Mobil’s [and others’] profits by 10%, then what do you suppose will happen if all vehicles switch to E15? Refiners are already suffering from lack of demand, brought on by the recent recession and the influx of more-fuel-efficient vehicles, so a further 5% cut in profits will hurt even more. Of course, the perfect excuse for this lobbying is “to protect the consumer,” in spite of the fact that E10 and E15 blends are almost no more corrosive in a modern engine than nearly a decade ago when E5 was first adopted.