Energy Business

Firms Approved to Make E15 Ethanol (ADM, BIOF, VLO)

The US Environmental Protection Agency yesterday released a list of 20 companies that have been approved to manufacture ethanol for use in blending the 15% ethanol-gasoline blend known as E15. Among the 20 companies are Archer Daniels Midland Co. (NYSE: ADM), BioFuel Energy Corp. (NASDAQ: BIOF), privately held Cargill Inc., and the US division of Spain’s Abengoa SA. Valero Energy Corp. (NYSE: VLO

) does not appear on the EPA’s list, but firms were allowed to maintain confidentiality if they chose, so Valero’s absence does not mean that the firm isn’t approved to make E15.

Last year the EPA approved E15 for use in cars manufactured in 2001 and later, while cars made before that date may only use the 10% ethanol blend (E10). That has caused a problem because there are still so many pre-2001 autos on US roads. And just because the makers have been registered, that doesn’t mean they can sell E15:

E15 was granted conditional waivers to be introduced into commerce for use in model year 2001 and newer light-duty motor vehicles (cars and all but the largest pick-up trucks, vans and SUVs), and the misfueling mitigation conditions of the waiver must be met before E15 can be lawfully sold. Specifically, those fuel and fuel additive manufacturers wishing to sell E15 must obtain EPA approval of, and implement a misfueling mitigation plan and a survey plan before selling E15.

In addition to these restrictions, there are restrictions on E15 in some states as well.

E15 is a completely unnecessary fuel blend. The ethanol industry needed something to make up for the loss of its subsidies, so it persuaded Congress that a 15% ethanol blend would lower pump prices and reduce America’s dependence on imported oil. Neither of those is strictly true. What is true is that the lower energy content of ethanol (about 30% less than gasoline) typically ends up costing drivers at least as much as pure gasoline because they have to buy more of it to get the same mileage. An ethanol blend of 15% just lowers mileage even more.

The full list of EPA-approved ethanol makers is here.

Paul Ausick