1. Regulatory Issues Associated with the Use of Higher Ethanol Blends Ann Seha Assistant Commissioner Minnesota Pollution Control Agency

2. Minnesota Proposed Legislation Sets a goal for ethanol to be 20% of state gasoline use Encourages E85 use as one way to meet the goal If, by 2010, expanded use of E85 has not met goal, an E20 fuel mandate takes effect in 2012 Mandate contingent on approval of fuel under federal Clean Air Act

3. E85 Approach E85 is an already approved alternative fuel Minnesota has about half of the nation’s E85 fueling stations Governor’s Executive Order requires state agencies to lead by example Goal is 25% of fuel used in 2010, and 50% by 2015 MPCA fleet uses 22% ethanol today

4. Minnesota Strategy Increase ethanol use starting now E85 is an excellent fuel Get the data and information needed to have the U.S. EPA decide on a waiver Increase use of a renewable fuel in a way that meets environmental requirements

5. Clean Air Act Fuel Approval Requirements Section 211(f) requires U.S. EPA approval of any new fuel or fuel additive Purpose: to assure that new fuel or additive does not impair the emission control systems of vehicles Applies to any change in concentration of the fuel or additive

6. Clean Air Act Fuel Approval Requirements E10 approved for use in 1991 Once approved, approval applies nationally Standard: fuel must be found “substantially similar” to approved fuels Procedure: EPA has 180 days to act on application, will invite public comment If EPA does not act in the 180 days, the waiver is granted

7. Approval Element: Emissions Testing Tailpipe testing: type and amount of pollutants that come from the tailpipe when vehicle is running Evaporative testing: type and amount of pollutants that come from the engine and fuel system when vehicle not running Tests must be run on a variety of vehicles at an EPA-approved facility

8. Approval Element: Emissions Testing Waiver request might draw attention from areas concerned about effect of fuel on their local air quality issues U.S. EPA has not made any final determination on the different concerns being expressed Debate is whether the type and amount of tailpipe and evaporative emissions from ethanol blends balance out to be “substantially similar” to those of gasoline 2012 timeline will benefit from Tier II vehicle capabilities

9. Approval Element: Vehicle Compatibility Testing Testing measures whether the fuel compromises the vehicle’s performance or “drive-ability” Tests performed in EPA-approved facility and under real world driving conditions Assesses effect of fuel on vehicle fuel delivery systems and emission control systems

10. Approval Element: Human Health Impact Evaluation Testing to find out if burning the fuel could pose human health impacts Limited number of labs in U.S. are qualified to perform this testing

11. Costs EPA estimated the cost of the testing needed to support the waiver to be $2-4 Million Minnesota looking to combine federal grant funds with funds provided by interested parties to do the testing Minnesota legislation assures market for E20 when waiver received

12. For Further Information Ann Seha, Minnesota Pollution Control Agency, (651)284-0382 and ann.seha@pca.state.mn.us ann.seha@pca.state.mn.us U.S. Dept. of Energy, National Renewable Energy Laboratory website: http://www.nrel.gov/vehiclesandfuels/data _fuels.html. http://www.nrel.gov/vehiclesandfuels/data _fuels.html