“Nice Try” Won’t Really Lower Prices at Pump for California Drivers

girl pumping gas

Gov. Gavin Newsom signed in October legislation that allowed a new motor fuel blend to be sold in California. Naturally he bragged that Sacramento was “cutting red tape to provide consumers with more options.” An additional option, yes, but lower fuel prices – not necessarily. Cutting gas prices is rarely a simple matter of making a minor change in the rules.

The law required input from the California Air Resources Board to take effect, which recently said the blend “does not pose a significant adverse impact on public health or the environment compared to” the blend that it is replacing.

The new blend, E15, is made with up to 15% ethanol, a biofuel produced from corn. It’s cheaper than the blend it is replacing, E10 (in part because of federal subsidies, which at one time “cost taxpayers $1.78 every time a gallon of ethanol replaced a gallon of gasoline”), so it gives politicians a chance to crow about gas prices in the second-most expensive state in the country outside Hawaii.

But the E15 blend’s inefficiencies make it not much of an improvement for overtaxed drivers.

The difference is fuel economy is not necessarily vast. Estimates claim that E15’s mileage is 1% to 2% lower than E10’s. But a report from transportation energy consulting firm Stillwater Associates projects that “to maintain the same cost per mile driven in a $4-per-gallon market,” a gallon of E15 “would need to be reduced by approximately 7 cents per gallon,” as cars will “need 1.74% more E15 to travel the same distance as E10.”

“Without any corresponding price adjustment,” the report concludes, “consumers would effectively pay more per mile when using E15 instead of E10.”

Logistics can’t be ignored. How stations sell E15 will make a difference. Will it be dispensed from the pumps as they are, or will special equipment be needed the same way that diesel and alternative fuels require a distinctly different nozzle so that consumers won’t fill up with the wrong fuel?

According to Ethanol Producer Magazine, “CARB wants to treat E15 as an alternative fuel.” While that might the fastest way to make it available, doing so “would increase costs for retailers who would have to meet equipment standards for fuel with 14 times more additional ethanol than is actually added to E10 to make it E15.”

Some consumers will also have more to pay in repair costs using E15. The higher alcohol content can damage fuel lines, injectors, seals, gaskets and valve seats, says Popular Mechanics.

The Environmental Protection Agency tells us that E15 is safe for 2001 and later cars, SUVs and light trucks, but not for motorcycles, heavy-duty engines in buses and delivery trucks, boats, snowmobiles, lawnmowers and chain saws. Popular Mechanics puts the safe date for cars at 2007.

But a Journal of Engineering study found that both E10 and E15 cause “elevated operating temperatures that can pose challenges for engine operation” and push engines to run outside of their optimal temperature ranges, “negatively impacting engine lifespan, efficiency, and performance and increasing exhaust gas emissions.” The negative effects of E15 were more pronounced than E10’s, though, in most of the tests.

It’s recommended that no automobile model year 2000 and earlier use gasoline that has more than 10% ethanol. The number of California cars that fall within that age group are of course shrinking, but Hagerty, which insures classic cars, puts it at 1.2 million in 2020, not an insignificant number.

E15 is unlikely to be the answer for California’s painfully high gas prices. Call it a “nice try,” but gas will never be reasonably priced in the state until the thicket of taxes and regulations that have driven it to unreasonable heights is ripped up by its roots.

Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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