E15 Gas Pump Labels Get White House OK

WASHINGTON, D.C. -- The Obama administration has given the OK to a new gasoline pump label that would alert motorists when they are about to fill their vehicles with a fuel blended with a higher rate of ethanol.

The move comes five months after the Environmental Protection Agency (EPA) approved raising the amount of ethanol in gas to 15 percent, up from the previous 10 percent, for newer cars and trucks. The EPA's approval was hailed by ethanol industry insiders and farmers who supply corn to make the fuel, according to Reuters.

Pro-ethanol trade group Growth Energy said the new labels could clear the path for E15 gas to become available across the country by end of September. The EPA still needs to register E15 before it can be sold.

However, the convenience store industry has not given E15 such a warm reception. For example, following the EPA's decision in January, QuikTrip said it would not sell E15 at its gas stations until it was proven safe for all vehicles, as CSNews Online reported. QuikTrip is the largest gas retailer in Tulsa, Okla.

Also at issue, gas retailers will have to invest in new pumps and separate storage tanks to accommodate E15. According to Reuters, NACS and the Society of Independent Gasoline Marketers of America (SIGMA) sent a letter opposing the new labels to the EPA two weeks ago. Combined, members of the two associations account for approximately 80 percent of the gas sold in the United States.

A major concern for gas retailers is whether they will be held responsible for damages if a motorist puts E15 in a vehicle that does not have the right engine. E15 is approved for vehicles built since 2001.

Last month, NACS Chairman Jeff Miller, who is also president of Norfolk, Va.-based Miller Oil Co., testified before the House Energy and Commerce Committee's Subcommittee on Energy Power and asked the legislators for help in making renewable fuels more affordable and less risky.

A major concern when choosing to sell a new fuel is the cost of compatibility, Miller said, adding that all related fueling equipment must be listed by Underwriters Laboratories (UL) as compatible. He explained that because UL will not recertify any existing equipment, even equipment that is technically compatible with the new fuel, a retailer's only legal option is to replace dispensers, at a cost of roughly $20,000 per unit. In addition, underground storage equipment must be replaced if it is not UL certified.

"Once I crack open concrete, my costs could easily exceed $100,000 per location, which now gets us up to about $200,000 in pump and tank costs. So offering E15 could become very expensive," Miller said.