A move against E15 - Obama signs the Agricultural Act of 2014

The E15 rollout has been going a lot slow than originally planned. Now, a new Ag law could make E15 expansions even more difficult. Drivers and small engine owners rejoice.

A few years, when the first serious discussions started about expansion of ethanol in gasoline from 10% to 15%, everyone figured that E15 would be available across the entire country by now. That is not even close to being the reality we see in 2014. E15 availability is pretty much limited to the corn-belt Midwest right now. But there's always been that simmering tension about when E15 would eventually infiltrate other areas of the country, forcing fuel users to make a sometimes-unwanted choice. Now, that E15 expansion appears even more difficult and unlikely.

Stunting The Spread of E15 At The Pump

The Agriculture Act of 2014, signed by President Obama on February 7, primarily sets our country's government policies in the arenas of food production and agriculture.  These types of bills are big and complicated and hundreds or thousands of pages in size. When analysts were sifting through the text of the Agriculture Act, they spotted a provision concerning a subsidy for the Rural Energy for America program. Or, more specifically, a cut of the subsidy for that program.

At first glance, there doesn't seem that much to it. But this Rural Energy program exists to help gas stations install E15 blender pumps.  These pumps mix the gasoline and ethanol at the pump itself, at whatever percentage the consumer chooses, instead of making the gas station purchase the fuel pre-blended with ethanol. This is an important element to whether the expansion of E15 across the nation goes quickly or slowly or not at all. Right now, E15 only comes to your local gas station if that station chooses to offer it. But in order to offer it, they have to have E15-specific equipment (like storage tanks and E15-only pumps) to dispense it, and that's something which cash-strapped gas stations aren't likely to spring for up front. So government subsidies like the Rural Energy program were an important part of the plans to "assist" E15's spread to your neighborhood. This cut nixes something that the ethanol industry has long considered to be essential to any widespread E15 spread across the nation.

For the people asking why this cut was put into the bill, it's very likely because of heavy lobbying from the American Motorcycle Association (AMA), who have long been against E15 because of potential mis-fueling by consumers. E15 isn't supposed to go into boats and motorcycles and small engines. But people are people, after all, and the AMA strongly argued that having blending pumps that allowed consumers to choose between E10 or E15 or E85 and other blends, would cause a lot of consumers to put the wrong fuel (like E15) into engines that it wasn't supposed to go.

Other Cuts Hurt Ethanol Expansion As Well

The Rural Energy for America cuts weren't the only blow to the ethanol industry dealt by the 2014 Ag Act.  It also cut previously mandatory funding for "advanced biofuels development" by 75%, saving the taxpayers $45 billion. "Advanced biofuels" means research programs into things like making biodiesel from algae and making ethanol from things like garbage and cellulosic sources (i.e. corn stalks and waste leaves). It also further cut $5 billion in subsidies going to farmers who grow corn to be used in ethanol production. No doubt we will be hearing some version of an argument on how the 2014 Agriculture Act hurts the cash-strapped American farmer.  In reality, it's more likely hurting the bottom line of some large corporations, instead, not the family farmer.