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EO is Required in the Marketplace 

EIA collects and publishes adequate data in their petroleum supply surveys to estimate EO use. 

As the anal ysis below shows, the EO volume is a significant portion of the gasoline pool and 

should be included in the calculation of how much ethanol can be consumed. 

The volume of EO supplied to the market can be determined by using the following equation: 

Product Supplied = Domestic produclion + imporls - exporls - change in inven101y 

EIA collects and publishes data for production, imports, and inventory of finished EO. EIA does 

not collect export data, but publishes data collected by the Census Bureau. Exports of" finished 

gasoline" are likely all EO due to the wide range of allowed ethanol content in the world and 

difficulty of transporting ethanol-blended gasoline. The Table demonstrates the calculation of 

EO. 

EO Product Supplied Percent of Total Gasoline 

50% 

45% 

40% 

35% 

30% 

25% 

20% 

15% 

10% 

5% data source: EIA 

0% ~ ~ ~ m m m o o o ~ 9 0 0 0 9 9 ~ M rl rl 

c > ~ c > ~ c > ~ c ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 

rl 

~ 

~ 

~ 

H 

N N 

rl 

N 

H m m m ~ ~ ~ ~ ~ rl rl rl ~ rl rl rl rl > ~ c > ~ c > ~ c > ~ c > ro ~ ro ro ~ ro ro ~ ~ m ~ ro m 2 ~ ~ 2 ~ ~ 2 ~ ~ 2 ~ ~ 2 

• EO demand is significant and at least I 00 times larger than the combined volumes of E85 

and E l 5. 

• The Proposed Rule errs by excluding demonstrated EO demand when calculating the 

capability of the gasoline market to absorb additional ethanol. 

• Limited data on EO, E15, and E85 demand increases uncertainty, which justifies sening a 

conservative target that avoids the chance of inadvertentl y crossing the blend wall. 

• To ensure the standards do not exceed the blendwall, we recommend that EPA use, as a 

prudent guide, 9.7 percent ethanol in the part of the gasoline pool that is not E85. 

o Allows for a base EO demand to cover some of the inherent uncertainty 

o Recognizes the rea l world measurement inaccuracies that encourage slight underblending to avoid E 15 compliance issues (E 15 is defined as blends above I 0.1 %) 
@:ongre.u.n of t11e 1ltnitell ~tate.a 

l!l!Iu.siJingtun, i l<!t 20515 

The Honorable Gina McCatthy 

Admin.ist:rator 

U.S. Environmental Protection Agency 

1200 PeiUlsylvania Avenue, NW 

Washington, DC 20460 

Dear Administrator McCarthy, 

November 4, 2015 

We 

Obligations 

write to express significant concern with the recently proposed 2016 Renewable Volume 

would 

(RVO) under the Renewable Fuel Standard (RFS). The RVO as currently proposed 

American 

constitute a breach of the ethanol blendwall, which would cause adverse impacts on 

consumers and the economy. 

Congress expanded the RFS when it passed the Energy Independence and Security Act of 2007 

(EISA). EISA mandated an mUlually increasing volume of biofuel to be blended and consumed 

market 

in the nation's motor fuel supply, reaching 36 billion gallons of biofuels in 2022. Jn 2007, the 

assumptions regarding the futw·c of transportation fuels in the United States were very 

different from the realities of the market today. The Energy Information Administration (EIA) at 

the time projected motor gasoline demand to significantly rise through 20221

has 

• Since then, ETA 

revised its 2007 projection of motor gasoline in 2022 downward by 27% and projects motor 

gasoline demand to continue to decline tlu·ough 2035 1

• 

Increased fuel efficiency has led to shrinking gasoline demand. This current reality, coupled with 

an 

blendwall

increasing biofuel blending level requirement, has exacerbated the onset of the El 0 

- the point at which the gasoline supply is saturated with tl1e maximum amount of 

ethanol that the current vehicle fleet, marine and other small engines, and refueling infrastructw·e 

can safely accommodate. We agree with the EPA's conclusion in its first RVO proposal for 2014 

and in its current proposal for 2014, 2015, and 2016 tllat the ElO blendwall is a binding 

constraint. 

We are gravely concerned, however, that despite the Agency's recognition of the blendwall, the 

2016 proposal aclmowledges that it will be breached nonetheless. Specifically, EPA states tbat 

the 2016 RVO "includes volumes ofrenewable fuel that will require either ethanol use at levels 

significantly beyond the level of the El 0 bJendwall, or significantly greater use of non-ethanol 

renewable fuels than has occurred to date. "

2 

1 Energy Information Administration, Annual Energy Outlook 2007-2015, Reference Case Tabla II 2 

Standard 

Federal Register, 

Program: 

Vol. 80, No. Ill, Wednesday, June I 0, 2015, Proposed Rules (p.331 02), EPA RenetYable Fuel 

Rul

Standards/or 2014, 2015, and 2016 and Biomass-Based Diesel Volume for 2017; Proposed 

e 

PIUNffO ON RECYClfO PAPER 
The Honorable Gina McCnrthy 

Page 2 

Multiple studies have shown detrimental economic harm may be caused by breaching the E1 0 

blendwall. A 2014 report on the RFS by the nonpattisan Congressional Budget Office concluded 

that requiring the volumes of biofuel in EISA, which would breach the blend wall, could increase 

the price ofElO gasoline by up to 26 cents per gallon3

. NERA concludes in a July 27,2015 study 

that "higher gasoline prices leave consumers with Jess disposable income'h·, further hindering 

economic growth. An RFS study by Charles River Associates concms: "The result [of exceeding 

the blendwall] will be limited availability, higher consumer costs, and fewer sales of 

conventional transportation fuels

5

." This adverse economic harm falls hardest on America's 

lower income families. 

EPA acknowledges that its 2016 RVO proposal would require significant greater use of El 5 and 

E85 in order to meet the proposed mandate in 2016. Therefore, tllis proposal is problematic not 

only' in pdnciple, but it is also impractical since it would take decades, not months, to build out 

the compatible vehicle fleet and install the necessary retail infrastructure to acconuuodate the 

higher blends of ethanol. AAA calculates that only 5% of the vehicles on ~e road are approved 

to use E156 and the EIA calculates that only 6% of vehicles can use E857

• The refueling retail 

infrastructure is even more limited with only 2% of retail stations selling E858 and only 100 

stations nationwide selling EI59

. 

Congress will continue its work toward a bipartisan solution to deal with the RFS. As this work 

continues, it is critical that EPA use its statutory authority to waive EISA's conventional biofuel 

volwne to keep the blending requirements below the El 0 blendwall, and to help limit the 

economic and consumer harm this program has already caused. 

Sincerely, 

Bill Flores Peter Welch Bob Goodlatte 

Member of Congress Member of Congress Member of Congress 

~~ Member of Congress 

~~ Steve Womack 

Member of Congress 

3 Congressionnl Budget Office, The Renewable Fuel Standard: Issues for 2014 and Beyond(June 20 14) 4 NERA Economic Consulting, Economic Impacts Resultingfi'om implementation of RFS2 Progmm (July 20 I 5) 

$Charles River Associates, Impact of the Blend Wall Constraint in Complying with the Renewable Fuel Standard 

~ovember 20 I I) 

'American Automobile Association, Press ReleAse "New E15 Gasoline May Damage Vehicles and Cause 

Consumer Confusion" (December 20 12) 7 Energy Information Administralion, Annual Energy Outlook 2014 8 Fuels Institute, E85: A Market Pe1jormance Analysis and Forecast (20 14) 9 Renewable Fuels Association data (www.ethanolrfa.org) 
The Honorable Gina McCarthy 

Page 3 

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Page 3 

Jeff Duncan Ryan Zinke 

Lou Barletta Bill Posey 

Bradley Byrne Rob Bishop 

Glenn Thompson Robert Hurt 

Steve Russell Bruce Westerman 

Tom Price Michael T. McCaul 

Joe Heck Garret Graves 

Gary Palmer Joaquin Castro 

Jim Bridenstine Mia B. Love 

Page4 

Robert J. Dold Tom Rice 

Robert Pittenger Barbara Comstock 

Dennis A. Ross Charles J. "Chuck" 

Fleischmann 

Robert Aderholt Cedric Richmond 

Mimi Walters Barry Loudermilk 

Kevin Brady Gregg Harper 

Thomas Massie Brian Babin 

W ill Hurd Richard Hanna 

Doug LaMalfa Ron DeSantis 

Page 5 

Ryan Costello David P. Roe 

Denny Heck Peter King 

David Rouzer Jeff Miller 

Joseph R. Pitts Mark E. Amodei 

Scott Rlgell Dave Brat 

Marc A. Veasey Frank Guinta 

Scott DesJarlais John Ratcliffe 

David B. McKinley Chris Stewart 

David Schweikert Steven M. Palazzo 

Page 6 

Dan Benishek Mario Diaz-Balart 

Rick Allen Fllemon Vela 

Ted Yoho Mike Pompeo 

Randy 1<. Weber, Sr. Patrick Meehan 

George Holding Earl L. "Buddy" Carter 

Tom MacArthur Richard Hudson 

Paul Gosar · Mil~e Bishop 

Evan Jenl<ins David Valadao 

Glenn Grothman Devin Nunes 

Page 7 

Lois Frankel Blake Farenthold 

Kay Granger Steve Knight 

Jamie Herrera H. Morgan Griffith 

Beutler 

Martha MeSally Diane Blade 

John Katko Markwayne Mullin 

Renee Ellmers Alexander X. Mooney 

Mo Brooks French Hill 

Paul Cook Chris Collins 

Keith Rothfus Scott Perry 

Page 8 

Christopher P. Dan Newhouse 

Gibson 

Billy Long Raul R. Labrador 

Andy Harris Mike Kelly 

Jim Jordan Lee Zeldin 

Jody Hice Doug Collins 

Andy Barr Charles W. Boustany, Jr. 

Carlos Curbelo Trent Kelly 

Randy K. Trey Gowdy 

Neugebauer 

Roger Williams Bradley Wenstrup 
The Honorable Gina McCart hy 

Page 14 

Page 9 

Eric A. "Rick" Peter DeFazio 

Crawford 

Rob Woodall Ander Crenshaw 

Richard Nugent John Fleming 

Joe Barton Gregg Walden 

John Carter David W. Jolly 

Gus M. Bilirakis Chellie Pingree 

Pete Olson John Mica 

Mark Sanford Lynn Westmoreland 

John J. Duncan, Jr. Mac Thornberry 

Page 10 

Henry Cuellar Darrell E. lssa 

Charles W. Dent Dana Rohrabacher 

Jeb Hensarling Sam Johnson 

Joe Wilson Edward R. Royce 

Scott Garrett Michael K. Simpson 

Pete Sessions Kenny Marchant 

Louie Gohmert Ruben Hinojosa 

Marsha Blackburn G. K. Butterfield 

Bill Shuster Rodney P. Frelinghuysen 

Page 11 

Don Young Tom McClintock 

Steve Scalise Michael C. Burgess 

Walter B. Jones Matt Salmon 

Virginia Foxx Leonard Lance 

Steve Chabot John Abney Culberson 

Christopher H. Doug Lamborn 

Smith 

Lamar Smith Ted Poe 

Austin Scott Mick Mulvaney 

Frank A. LoBiondo Tim Murphy 

Page 12 

Duncan Hunter Kurt Schrader 

Stevan Pearce Cynthia Lummis 

Trent Franks Tim Walberg 

Tom Reed Tom Graves 

Mike Coffman Ben Ray Lujan 

F. James Tom Cole 

Sensenbrenner 

Stephen Fincher Gene Green 

Robert J. Wittman K. Michael Conaway 

Bruce Poliquin Kevin McCarthy