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Biofuels: Challenges to the Transportation, Sale, and Use of Intermediate Ethanol Blends

GAO-11-513 Published: Jun 03, 2011. Publicly Released: Jul 08, 2011.
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U.S. transportation relies largely on oil for fuel. Biofuels can be an alternative to oil and are produced from renewable sources, like corn. In 2005, Congress created the Renewable Fuel Standard (RFS), which requires transportation fuel to contain 36 billion gallons of biofuels by 2022. The most common U.S. biofuel is ethanol, typically produced from corn in the Midwest, transported by rail, and blended with gasoline as E10 (10 percent ethanol). Use of intermediate blends, such as E15 (15 percent ethanol), would increase the amount of ethanol used in transportation fuel to meet the RFS. The Environmental Protection Agency (EPA) recently allowed E15 for use with certain automobiles. GAO was asked to examine (1) challenges, if any, to transporting additional ethanol to meet the RFS, (2) challenges, if any, to selling intermediate blends, and (3) studies on the effects of intermediate blends in automobiles and nonroad engines. GAO examined government, industry, and academic reports; interviewed Department of Energy (DOE), EPA, and other government and industry officials; and visited research centers.


Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Labor To reduce uncertainty about the applicability of federal safety regulations, the Secretary of Labor should direct the Assistant Secretary for Occupational Safety and Health to issue guidance clarifying how OSHA's safety regulations on fuel-dispensing equipment should be applied to fuel retailers selling intermediate ethanol blends.
Closed – Not Implemented
Based on information provided by OSHA officials in November 2013 and September 2014, the recommendation is no longer valid because circumstances have changed. OSHA officials cited three examples for the change in circumstances. First, to address this recommendation, OSHA reached out to numerous stakeholders, including the National Association of State Fire Marshals and the International Association of Fire Chiefs, both of whose members have enforcement responsibilities for service station safety at the State level. They found that OSHA's safety requirements for fuel-dispensing equipment and higher ethanol fuel blends were well understood. Second, OSHA officials found that the issue of using dispensing equipment unlisted for ethanol blends is decreasing as appropriately listed equipment is being introduced to replace legacy equipment through traditional maintenance programs. Third, OSHA officials found that EPA's ongoing postponement of higher ethanol consumption requirements has reduced the pressure on service stations to upgrade or replace their equipment. According to OSHA officials, OSHA currently has no plans for any special emphasis enforcement programs or new guidance for service stations, but will continue to monitor the situation.
Environmental Protection Agency To reduce uncertainty about the potential environmental impacts of storing intermediate ethanol blends at retail fueling locations, the Administrator of EPA should determine what additional research, such as research on the suitability of specific UST components, is necessary to facilitate a transition to intermediate ethanol blends, and work with other federal agencies to develop a plan to undertake such research.
Closed – Implemented
In August 2013, EPA officials provided information on their efforts to plan and conduct additional research related to intermediate ethanol blends. EPA activities included (1) issuing two reports in 2012 detailing test results of automatic tank gauging equipment used in various ethanol blends; (2) communicating EPA findings of the impact of microbes associated with ethanol fuels on UST system equipment in 2012; and (3)working with Oak Ridge National Laboratory to better understand the impact intermediate ethanol blends would have on legacy UST equipment, which resulted in a July 2012 report. EPA officials also stated that they currently have work underway on (1) determining the impact of ethanol on other release detection equipment, and (2) a forensic-style analysis of releases that are caused by ethanol. These activities are responsive to GAO's recommendation.

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