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Marathon, state seek ethanol compromise

The company wants to bring a fuel blend to Florida, but officials won't tweak standards.

By David Adams
Published March 31, 2007

Marathon Petroleum, the state's largest fuel provider, is poised to distribute ethanol-blended gasoline throughout Florida, but the company has become deadlocked with state regulators over technical standards.

Marathon wants to blend corn-based ethanol with gasoline at a facility it is renovating at the Port of Tampa. The blended fuel known as E10 (for 10 percent ethanol) would be the first ethanol fuel widely available to Florida consumers.

Florida's Department of Agriculture and Consumer Services says it is unwilling to tweak state regulations until it gets scientific data to satisfy a fuel vapor issue, which officials fear could cause vehicles to stall in hot weather.

Marathon wants the state to modify the standard so its fuel would comply. The Houston-based company points to other states where regulations have been modified to suit E10 suppliers. Among them are Arkansas and Louisiana, which have climates similar to Florida's.

State regulators say they support use of ethanol-blended fuels, but they have a statutory obligation to protect consumers.

"We are at an impasse," said Jay Levenstein, deputy commissioner of the Department of Agriculture and Consumer Services.

"We are both frustrated. They want to tap into the market, and nobody wants to bring ethanol into the state more than we do."

An official for Marathon said the company is installing "millions of dollars" in blending equipment at its two terminals at the Port of Tampa and Port Everglades on the east coast.

The company says it is confident it can offer E10 at "competitive rates" to its customers, including almost 200 Marathon-branded outlets across the state.

Other companies are said to be lining up behind Marathon, waiting to see what the state does. "It's not just Marathon," said David Mica, director of the Florida Petroleum Council. "Major, major companies are looking to expand this market."

The stumbling block is a fuzzy regulatory issue arising from vapor volatility when gasoline is blended with ethanol. In extreme cases it can cause "vapor lock" in car engines, causing them to stall.

Florida follows the industry standard set by the American Society for Testing Materials, a nonprofit advisory group that is one of the top standard setters in the world for consumer products.

But Marathon says ASTM's standard for E10 sets too high a bar for gasoline "splashed' with ethanol.

It prefers another set of standards that certifies the ethanol and the gasoline separately, before blending.

"It is a major impediment to our moving forward," said Daniel Moenter, who handles government affairs for Marathon in Florida.

In talks earlier this year, the Department of Agriculture offered to relax the regulations, but not as much as Marathon asked.

"We moved a little bit, but we are just not prepared to issue as large a waiver as they want," said Levenstein. "It's too big a risk for our consumers."

Despite the current impasse Levenstein said he was confident ethanol would be blended in Florida soon.

Fast Facts:

Ethanol vs. gasoline

As a high-octane fuel, ethanol burns faster than conventional gasoline. One gallon of ethanol has about 66 percent of the energy of one gallon of gasoline.

E10 has an octane rating of about 91. Tests and studies indicate that fuel economy may decrease by approximately 2 percent in cars using E10 rather than conventional gasoline.

E10 emissions of pollutants are about 2 percent less than conventional gasoline.

Retailers say they expect E10 to be priced competitively with regular gasoline.

Sources: U.S. Department of Energy; Renewable Fuels Association; and Ethanol Promotion and Information Council

[Last modified March 30, 2007, 22:59:49]