UNITED STATES ENVIRONMENTAL PROTECTION AGENCY NATIONAL VEHICLE AND FUEL EMISSIONS LABORATORY

2565 PLYMOUTH ROAD ANN ARBOR, MI 48105

- 2498

OFFICE OF AIR AND RADIATION Memorandum Date: June 17 , 2013 From: Jeff Herzog, Assess ment and Standards Divisions,

Office of Transportation and Air Quality To: Docket # EPA

- HQ

- OAR

- 2011

- 0135 Subject: Meeting with Representatives of ASTM International on June 13 , 2013 ,

Regardi ng In

- Use Quality Standards for E51

- 83 On J une 13 , 2013, staff f

rom the Office of Transportation and Air Quality (OTA Q) met with representatives of ASTM International to discuss in

- use fuel quality standards for E51

- 83 (i.e. ethanol blends that contain 51 to 83 volume percent ethanol for use in flexible fuel vehicles)
. EPA provided presentation materials on the subject from a June 4, 2013, meeting with the California Air Resources Board to help frame the discussion (attached). The following peopl e particip ated in person at OTAQ’s facility in Ann Arbor Michigan : ASTM : Colman Jones, General Motors

Charles Corr, Archer Daniels Midland EPA : Chris Brunner, Jeff Herzog, Paul Machiele , Tia Sutton The following people participated by phone: EPA: Paul Argyrop oulos

Attachments: EPA presentation materials

# E51
- 83 and E16

- 50

EPA briefing for the California Air Resources Board, June 4, 2013

# The E51

- 83 Problem

• No specific regulations for in

- use E51
- 83 quality
• CAA 211(f) requires in

- use fuels to be subsim to vehicle cert fuel

– FFV cert fuel historically made from denatured ethanol and the gasoline used for certification testing with butane trimming. Thus, blendstocks used in E51

- 83 must be subsim to gasoline

– Regulatory requirements for FFV cert test fuel are proposed in Tier 3


### • 2006 guidance that RFG/RBOB must be used to make E51

- 83 in RFG areas
• These have been the only two levers to constrain the blendstocks used to make E51

- 83

– Prevent dumping of stuff like cheap waste solvents into E51

- 83


### • We have stated that there are no provisions to allow the use of natural gasoline in E51

- 83

– Nevertheless, some ethanol blenders are ignoring the guidance, leading to market uncertainty


### • Some refiners, terminals, blenders have been asking EPA to clarify standards for E51

- 83

1 of 16

# The E51

- 83 Problem (continued)



### • The fuel & fuel additive (F&FA) registration and health effects testing requirements under part 79 have so far only been applied to gasoline and 

### highway diesel fuel
• E51
- 83 is not considered gasoline, & therefore has not yet been subject to the F&FA registration and health effects testing under part 79

– Could designate as a transportation fuel in the future and require health effects testing


### • No deposit control regs for E51

- 83 other than for the gasoline portion

– Low additive concentration may be exacerbating, rather than helping deposits


### • In addition to providing insufficient assurance of E51

- 83 quality, the current situation is creating barriers to the expansion in E51

- 83
• E85 volatility has been too low for good vehicle startability/performance

– Likely leading to increased emissions and constraining manufacturer options in the context of LEVIII/Tier 3

– Allowing use of high

- volatility natural gasoline and butane could help to meet the minimum ASTM volatility requirements while maximizing ethanol content

– Use of cheap natural gasoline and butane could make E51

- 83 more economical, thereby furthering the goals of the RFS program

2 of 16

# Potential for Natural Gasoline and Butane Blending to Lower High

- Ethanol Blend Prices

• Push for E30 to optimize use of octane benefits from ethanol
• Opportunity to increase ethanol use and reduce fuel costs through use of low

octane / inexpensive natural gasoline as a blendstock

• Domestic natural gasoline supply expected to increase substantially with growth in natural gas and tight

- oil production

– U.S. NGL production projected to increase ~45% from 2012 to 2017 (3,250 Mb/d by 2017)
• Blending of natural gasoline and butane would help to meet minimum ASTM volatility specs while maximizing ethanol content of E51

- 83

– RVP of natural gasoline and butane substantially higher than RBOB/CBOB
• Price of natural gasoline & butane significantly less than RBOB/CBOB

– NG prices may fall as additional volumes are produced that do not have a clear home
• Much of the natural gasoline will be produced in the midwest coincident with ethanol production
• We conducted a preliminary analysis of how natural gasoline and butane blending might help to reduce E51

- 83 & E30 prices

– Considered octane and distribution costs, but not potential additional natural gasoline & butane distribution infrastructure costs

3 of 16

## Preliminary Analysis of Potential Impacts on the Price of E51
- 83 & E30 from Natural Gasoline and Butane Blending

Blendstock RVP RON MON (R+M)/2 Million BTU / BBL BTU Blendstock /

BTU of CBOB NGL 12 73 72 72.5 4.69 93% EtOH 2.4 130 101.6 115.8 3.53 70% CBOB 9 96 86 83.8 5.02 100% RBOB 6 96 86 83.8 5.02 100% nButane 51.6 92.5 88 90.25 4.00 80% Blendstock Properties

4 of 16

## Preliminary Analysis of Potential Impacts on the Price of E51
- 83 & E30 from Natural Gasoline and Butane Blending (cont.)

Blendstock Wholesale $ / gallon Blendstock price

per gallon / CBOB price per gallon Blenstock price per

BTU / CBOB price per BTU NGL 2.13 73% 79% ETOH 2.52 83% 119% CBOB 2.90 100% 100% RBOB 2.98 103% 103% nButane 1.46 50% 63% Blendstock Wholesale Price

- Does not include additional NGL & butane distribution infrastructure capital costs

- Ethanol price is for Chicago

- NGL and butane prices are for Mt. Belview

- CBOB and RBOB prices are for Gulf Coast

- All prices are for early March 2013
5 of 16

## Preliminary Analysis of Potential Impacts on the Price of E51
- 83 & E30 from Natural Gasoline and Butane Blending (cont.)

Blend NGL % Butane % RVP Octane $ / gal BTU cost compared to E10 E10
- - 9 87 $2.92 100% E30 24.5%
- 9 90.6 $2.63 98% E51 49%
- 11.2 94.6 $2.33 95% E51 27%*

- 9 $2.50 E70 30%
- 9 102.8 $2.40 103% E80 18.8% 1.2% 9 107.4 $2.43 108% E85 12.3% 2.7% 9 109.8 $2.44 111%

Ethanol Blend Wholesale Price

* CBOB is remainder of HC blendstock
6 of 16

# E51
- 83 Discussion in the Tier 3 Rule

• Requested comment on new regulatory provisions to 

# ensure E51
- 83 quality while allowing use of natural gasoline, and butane/pentane as blendstocks

• Requested comment on removing requirement that gasoline portion contain a deposit control additive

– Would defer setting deposit control requirement for E51

- 83 until sufficient data is available


## • We are evaluating when it would be appropriate to 

# designate E51

- 83 as a transportation fuel and require health effects testing under the F&FA program
• Discussed need to ensure that all fossil fuel blendstocks used to make E51

- 83 incur an obligation under RFS

– Anticipate follow

- up action as part of RFS annual rules

7 of 16

# Two Options to Ensure E51
- 83 Quality

• Under Option 1, E51

- 83 producer would assume all 

## responsibilities of a refiner

– Provides the most flexibility re blendstocks used

– However, the per

- batch testing and other requirements would be impractical for most E51

- 83 blenders


## • Under Option 2, “E51

- 83 blender” would have minimal testing burden if they used only certified blendstocks

– Certified gasoline & BOBs (RFG/RBOB in RFG areas)

– Denatured ethanol that meets requirements proposed in T3 rule



### – Butane that meets existing requirements for downstream blending into gasoline

– Pentane that meets requirements similar to those for butane

– Natural gasoline that has been certified by producer for use in 

### E51
- 83

8 of 16

# Envisioned E51

- 83 Standards

• Under Option 1, the E51

- 83 refiner would be subject to

– 10 ppm sulfur average, 50 or 80 sulfur cap (depending 

## on what refinery

- gate cap is finalized in T3)

– 0.20 benzene cap

– C, H, N, O, S



## – Maximum RVP requirements for gasoline

– Minimum RVP requirements per ASTM


# • Compliance demonstrated on per

- batch basis via 

# testing

9 of 16

# Envisioned E51

- 83 Standards (continued)



### • Under Option 2, the E51

- 83 “blender” would comply by simply 

### blending compliant blendstocks (ethanol, denaturant, gasoline, natural gasoline, etc.)
• Would be subject to

– 65 or 95 downstream sulfur cap (depending on what is finalized in T3)



### – Anticipate that actual sulfur levels would typically be much lower and average at or below 10ppm


### • Compliance with sulfur cap and other chemical composition requirements could be demonstrated by retaining PTDs for certified blendstocks used and other quality control requirements that apply 

### to downstream parties
• Demonstration of compliance with envisioned RVP requirements an issue

– Evaluating the use of an RVP model in place of per

- batch testing

10 of 16

# Blendstock Requirements for E51

- 83 Blenders

- Denatured Fuel Ethanol

• Current sulfur cap for DFE is 30 ppm
• Tier 3 rule proposed

– 10 ppm sulfur cap

– Limiting denaturants to gasoline, BOBs, and natural gasoline

– Limiting denaturant concentration to max of 2.0 vol % (effectively 2.5% with rounding)

– Believe that proposed denaturant requirements would obviate the need for benzene, olefins, and aromatics specifications 

### (result in levels similar those under CARB’s requirements)

– Requested comment on whether it is appropriate to adopt specifications on denaturants similar to CARB’s (10 ppm max S, 0.06 v% Bz, 0.5 v% olefins, 1.7 v% aromatics)

11 of 16

# Blendstock Requirements for E51

- 83 Blenders
– Butane & Pentane

• Current sulfur cap for butane blended downstream of refiner is 30 ppm
• Tier 3 rule proposed a 10 ppm sulfur cap
• Proposed to maintain the other existing requirements

– Commercial grade butane: 95% pure, <=1.0 vol % olefins, <= 2.0 vol % aromatics, <=0.03 vol % benzene

– Non
- commercial grade butane: <=10.0 vol % olefins, <= 2.0 vol% aromatics, <= 0.03 vol % benzene



### – If non

- commercial grade butane is used, a quality assurance program is required that includes periodic sampling and testing of butane from each manufacturer


## • Tier 3 rule proposed to establish similar requirements for 

## downstream pentane blending

12 of 16

# Blendstock Requirements for E51

- 83 Blenders
– Natural Gasoline

• Producer of natural gasoline for use as an E51

- 83 blendstock would be required to register and conduct per - batch tesing similar to requirements for gasoline refiner



# • Producer would demonstrate compliance with 10 ppm sulfur cap, 0.20 vol % benzene cap, CHNOS

• Requested comment on need for other specifications (e.g., olefins, aromatics) and need to limit production sources (e.g., no drip gas)

• Producer would list RVP on PTD to facilitate blender 

# compliance with RVP requirements through modeling

13 of 16

# Path Forward to Address Outstanding Issues re Natural Gasoline

• Attempting to get DOE/NREL/ORNL to support study of (Details in Appendix #1):

– Natural gasoline production, markets, distribution, 

## prices

– In
- use natural gasoline quality

– Impacts of natural gasoline on FFV emissions



## – Development of RVP blending model to allow terminal blending without need for RVP testing


# • Seeking input from auto manufacturers, fuel producers, and other stakeholders

14 of 16

# The E16

- 50 Problem

• EPA currently has no specific regulations for in

- use E16
- 50 quality


# • Under the F&FA registration program, the gasoline family includes fuels with at least 50% clear gasoline

– Thus, E16

- 50 is logically subject to gasoline standards


# • ~ 300 blender pumps and the number is growing

– Currently, such blenders should be treated as refiners but they are unaware

– Such blends are likely violating our standards on F&FA registration, RVP, detergents, other?


## • Given DOE/USDA support for blender pumps, it makes dealing with them difficult


# • EPA has been approached to approve a blender pump project

15 of 16

# E16
- 50 Discussion in the Tier 3 Rule

• Treat E16
- 50 as gasoline (as today), or amend regulations similar to 

### the approach for E51

- 83
• Treating as gasoline would likely make use of blender pumps unworkable

– Per
- batch gasoline quality requirements impractical



### – In non
- RFG areas, 1 psi waiver for <=E10 would mean that some E16

- 50 blends would exceed 9 psi


### • Treating as an alternative fuel could accommodate the use of blender pumps

– Would need to allow E16

- 50 blends to meet 10 psi

• Would need to continue to require that FFVs be certified using 10 psi fuel, so evap. emissions effect should be neutral



### – All blendstocks used need to be certified upstream

– Would defer the question of health effects testing under the F&FA 

### program for the time being

16 of 16

# Appendix #1

Potential Analytical Plan re the use of Natural Gasoline as an E51

- 83 Blendstock

EPA briefing for the California Air Resources Board, June 4, 2013

# Natural Gasoline Market Characterization

• Characterize how domestic natural gasoline production volumes are projected to increase in the future.
• What are the potential uses for the increased volume of natural gasoline? (refinery, heavy crude oil diluent, petrochemical, export, other)
• Where will natural gasoline be produced and what options are available to transport it to various markets?

– What additional transportation infrastructure will be needed?
• How might the ramp up in natural gasoline volume affect its price?
• To what extent would the use of natural gasoline as a blendstock in the manufacture of high

level ethanol blends be a good market choice?
• Given other competing end

- uses for natural gasoline, how much natural gasoline potentially might be available for use in high

- level ethanol blends?
• What additional fuel distribution infrastructure would be needed to facilitate the use of naturual gasoline in high

- level ethanol blends?
• How might the use of natural gasoline in high

- level ethanol blends tend to reduce the BTU

adjusted price of high

- level ethanol blends compared to E10?
• What are the issues associated with segregating an existing pool of natural gasoline that would be suitable for use in high

- level ethanol blends or performing additional processing to produce such a segregated pool that would meet necessary specifications for the downstream blending of high

- level ethanol blends?

– How might the sulfur and benzene standards we establish for such a segregated natural gasoline pool impact feasibility and cost? (e.g., 10 ppm sulfur cap, 0.6 benzene cap)
• Would volatility limits for high

- level ethanol blends of 9 psi need to limit the volatility of a segregated natural gasoline pool to allow for downstream blending?
1 of 4

# Natural Gasoline Quality Evaluation

• Characterize the chemical composition and physical properties of natural gasoline that might influence vehicle 

## emissions and performance, and how these fuel parameters vary depending on the source of natural gasoline
• Sample natural gasoline from the range of possible domestic sources
• Measure sulfur, benzene, aromatics (speciated?), chlorine, salts, metals, distillation, oxidation stability, wastes and 

## other contamination, other?

- How does quality vary depending on source? (well

- crude vs. natural gas, fractionator, processor, refinery, drip gas).



## - How does quality vary by season?

2 of 4

# Vehicle Emission and Performance Test Program

• Based on consideration of the results from the natural gasoline quality evaluation, conduct exhaust emission testing on a range of ethanol blends varying ethanol, natural gasoline, and conventional gasoline composition. It is presumed that emissions sensitivity will also provide and assessment of driveability impacts.

• Based on results of fuel survey, evaluate extent that certain fuel parameters in the natural gasoline test fuel blendstock need to be modified to reflect fuel standards that we might expect to finalize

– E.g., sulfur and benzene content in the test fuel blendstock should be limited to ensure that the concentration in the blended test fuel is no greater than might be seen in gasoline meeting the proposed Tier 3 specifications)

• Report test fuel characteristics: sulfur, benzene, distillation, aromatics, RON, MON, speciation, blend fraction

– Test at 75F and 20F

– Test for: NOx, NMOG, PM mass, CO2, methane, toxics, and full emissions speciation on a subset

– 10 FFV test vehicles of high volume to reflect range in in

- use FFV vehicles

– Ethanol blends of E10, E30, E51, E70, E83 made with two types of natural gasoline (trimmed with butane as necessary to the desired RVP) for 75F testing and one type of natural gasoline for 20F testing to compare to similar blends made with CBOB (not adjusted with butane)

– Target 9 RVP natural gasoline blends for 75F testing, 12 RVP natural gasoline blends for 20F testing (CBOB blends at whatever RVP results
– just measure and report)

– Compare test results from ethanol blend fuel containing natural gasoline to results obtained using ethanol blend fuels formulated using CBOB

– Evaluate whether testing other than for exhaust emissions is needed

• Evaporative emissions?

• Additional testing needed to address performance impacts? DI, V/L

• Are there unique concerns that need to be addressed with respect to potential phase separation of ethanol blends made with natural gasoline?

– Fuel injector deposit control test using bench rig
3 of 4

# RVP Modeling and Validation

• Develop model to allow E51

- 83 blenders to demonstrate compliance with RVP requirements for finished fuel in place of per

- batch RVP testing

- Assumes RVP of blend components is available to blender (natural gasoline, CBOB. RBOB, RFG, CG, butane, pentane, denatured 

# fuel ethanol)

• Validate results from model by RVP testing

• How many different samples of natural gasoline 

# would need to be used in testing?

4 of 4