Blending ethanol into gasoline provides a variety of benefits for consumers, the environment, and the U.S. economy more generally. Domestically produced ethanol has largely replaced other fuel additives (which may be harmful to health, more expensive, and/or less effective), and further reduces the need for imported crude oil, reduces carbon emissions, and reduces the total costs to produce gasoline. Most gasoline sold at retail today is a blend known as “E10” which contains approximately 10 percent ethanol combined with
petroleum-based gasoline blendstock.
These benefits, however, are not limited to a 10-percent ethanol blend. Increasing the share of ethanol in gasoline is a trend that has accelerated around the U.S. in recent years. Increasing the ethanol blend up to 15 percent (“E15”) results in gasoline with comparable quality to E10, while providing proportionately more of the benefits noted above. In 2012, the U.S. Department of Energy (DOE) conducted a rigorous test of E15 across a range of engine types and found no adverse impact on any measure of performance, including fuel economy as well as maintenance, stating:
The Energy Department testing program was run on standard gasoline, E10, E15, and E20. The Energy Department test program was comprised of 86 vehicles operated up to 120,000 miles each using an industry-standard EPA-defined test cycle (called the Standard Road Cycle). The resulting Energy Department data showed no statistically significant loss of vehicle performance (emissions, fuel economy, and maintenance issues) attributable to the use of E15 fuel compared to straight gasoline.
Currently, E15 is offered for sale in 30 states. However, the largest market for gasoline in the U.S., California, has yet to approve E15 for retail sale. This paper analyzes trends in E15 sales across the U.S. and assesses the potential benefits for California consumers and retailers from the introduction of that fuel blend.