Ethanol Wins a Round on Capitol Hill Against Big Oil in Epic Battle Over E15 Gasoline

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Researched by Industrial Info Resources (Sugar Land, Texas)--An epic round between the ethanol industry and big oil took place this week as the U.S. Supreme Court on Monday decided not to hear a legal challenge of the federal government's decision to approve the sale of fuel containing 15% ethanol. The decision was considered a defeat for the American Petroleum Institute and several other groups that have been fighting the U.S. Environmental Protection Agency's 2010 approval of the E15 blend.

However, the blend will be approved for use only in vehicles produced since 2007, and E15 is still not recommended for use in classic cars and trucks, motorcycles and other recreational vehicles.

Approving a 15% blend my not even move the needle in terms of ethanol production. The capacity is already there. The problem lies in the distribution network, where big oil still controls the game. Of the nation's 180,000 fuel stations, only two dozen or so are selling E15.

E15 likely will be slightly cheaper than E10, though it will deliver worse mileage. And some fueling stations in the U.S. Midwest are fighting suppliers over the color of the pump hose.

One fuel retailer received a notice from Phillips 66 (NYSE:PSX), the nation's third-largest refiner, that the retailer could no longer sell the E15 fuel from its regular black fuel hoses. Instead, any gasoline with more than 10% ethanol has to be served from a separate, yellow hose, costing retailers more money to comply.

Until increased availability is installed in the U.S. fuel distribution network, the fight for higher blend of ethanol in gasoline my never leave Washington.

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