Assessment of a Reduction in the RVP of Conventional Gasoline in the Summer

The Renewable Fuels Association (RFA) retained MathPro Inc. to conduct a first-order analysis to estimate the additional costs that would be incurred by U.S. refiners if the RVP of conventional gasoline blendstock (CBOB) were reduced by 1 psi for the summer season – from about 9 psi to 8 psi. The proposed 1 psi reduction in RVP would apply to most CBOB produced for sale in the U.S.

On July 2, 2021, the U.S. Court of Appeals for the D.C. Circuit overturned the rule (the “E15 rule”) issued by EPA on June 10, 2019, extending to E15 gasoline the 1 psi ethanol RVP waiver for conventional gasoline in the summer ozone control season (June 1 September 15). Previously, the RVP waiver had applied only to E10 gasoline. The E15 rule allowed retailers in conventional gasoline (CG) markets to sell both finished E10 and E15 with RVP of 10 psi during the summer season. The E15 rule was designed to facilitate year-round supply of E15 gasoline, by allowing use of the same 9 RVP CBOB in blending either E10 or E15 finished CG in the summer. With the E15 rule overturned, retailers will again have to ensure that any E15 they sell in the summer season meets the prevailing 9 RVP standard for finished CG, while E10 continues to qualify for a 1 psi allowance via the ethanol RVP waiver. The Court’s ruling leaves E15
economically uncompetitive with E10 in conventional gasoline markets in the summer season, thereby foreclosing an important pathway for increasing ethanol’s share of the gasoline market.

In response, RFA is considering requesting that EPA, using its authority under the Clean Air Act, establish an RVP standard for CBOB of 8 psi. This would require refiners to reduce the current RVP of CBOBs by about 1 psi during the summer season — from about 9 RVP to 8 RVP. When blended with an 8 RVP CBOB, E15 and E10 gasolines both would meet the 9 RVP standard for finished summer CG, making the use of the RVP waiver for E10 unnecessary. This would allow E15 to be produced using E10 CBOBs and restore the blending options for E15 prevailing before the Court’s decision disallowing the use of the ethanol RVP waiver for E15, albeit with both finished E10 and E15 gasolines having lower RVPs.

Implementing the proposed reduction in the RVP of CBOB would increase the refining sector’s cost of RVP control. Consideration of such costs would be a key element in any rule-making that EPA would undertake.

This decrease in gasoline consumption and consumer expenditures would accrue to consumers and would reduce the national cost (not the refining cost) of the 1 psi reduction in the RVP of summer CBOB. This cost savings would not accrue to refiners but would partially offset the refining cost of meeting the 8 RVP standard.