21st Century Transportation Act Hints at E20

Reps. John Shimkus (R-IL) and Bill Flores (R-TX) introduced draft legislation to revamp the Renewable Fuel Standard by moving towards a fuel performance standard that would attempt to reduce emissions and preserve the liquid fuels industry. The draft bill known as the 21st Century Transportation Fuels Act would nix the 15-billion-gallon corn ethanol mandate in 2022 and transition to a national octane standard for gasoline.  The legislation would swap out a government mandate and replace it with a performance standard that autos, refiners and petroleum marketers would need to meet.

The draft legislation seeks to harmonize the issues facing the liquid fuels industry and automakers in a transition that includes changing base the type of base gasoline entering the marketplace.  The legislation encourages engine manufacturers to produce high compression engines (HCEs) warrantied up to E20 and refiners to produce higher octane gasoline known as 95 research octane number (RON) that would be compatible with these new engines.  Experts believe that 95 RON fuel is similar to today’s premium fuel and is likely to lower emissions.  Although 95 RON fuel can be produced and marketed without the addition of ethanol, similar to industry’s existing transition to a base sub-octane gasoline (commonly referred to as V-Grade in Iowa), ethanol and its octane boosting benefits is likely to continue to serve as a critical additive in the octane enhancement of gasoline and the performance of HCEs being produced by engine manufacturers in the future.

The draft legislation seeks to address many of the issues industry has faced in its current transition to E15, the legislation correctly places requirements on UST system component manufacturers, engine manufacturers, petroleum marketers, consumers, and government agencies in order to make any base gasoline transition as seamless as possible.  Some of the highlights contained within the Act that should be of interest to PMCI members include, misfuelling liability protection for retailers, E20 compatible UST system design, misfuelling technology incorporated into vehicles, consumer responsibility, standardized fuel labeling, and the extension of an RVP waiver for gasoline/ethanol blends containing up to 20% by volume ethanol.

Although the details of the draft are not yet final, the 21st Century Transportation Fuels Act appears to be attempting to address all issues associated with a major fuel-related transition up front and not after the legislation has been signed into law.  PMCI will be monitoring this legislation closely and will provide updates as it moves through the legislative process.