Ethanol is added to gasoline
Typical E85 badge used to identify flexible-fuel vehicles in the United States
Most of the gasoline in the United States is blended with some amount of ethanol. These blends are named by their ethanol content. For example, a blend of 10% ethanol and 90% gasoline (by volume) is known as E10 gasoline. In 2014, about 13 billion gallons of ethanol were added to gasoline in the United States, nearly all in mixtures of E10 or less.
Any gasoline-powered engine in the United States can use E10, but only specific types of vehicles can use mixtures containing more than 10% ethanol. Because ethanol contains approximately 67% of the energy content of gasoline per gallon, use of ethanol blends results in decreased vehicle fuel economy (miles traveled per gallon). Vehicle fuel economy may decrease by about 3% when using E10. Despite this reduced gas mileage, high crude oil prices and government incentives and mandates have resulted in increased ethanol consumption.
Government policies help boost ethanol use
Ethanol was one of the first automotive fuels in the United States. With the exception of the two World Wars, only small amounts of fuel ethanol were used until the 1970s. The oil embargo against the United States by major oil producers in the Middle East in 1973 and increases in oil prices in the late 1970s and early 1980s spurred interest in fuel ethanol as a way to reduce U.S. oil imports that had to be refined into gasoline. Various state and federal government policies and programs starting in the mid-1970s have led to increased ethanol use in gasoline. About two million gallons of fuel ethanol were used in 1981, and about 13 billion gallons were used in 2014. With the U.S. ethanol industry well established and concerns about the federal budget deficit, the U.S. Congress let a 45-cent-per-gallon tax credit for ethanol blenders and a 54-cent-per-gallon tariff on ethanol imports expire at the end of 2011. The tax credit for blenders had been available for three decades.
Ethanol use increased significantly in 2002 as states began banning the use of the gasoline oxygenate known as methyl tertiary butyl ether (MTBE) as a result of concerns that it contaminated groundwater. Ethanol quickly replaced MTBE as a gasoline oxygenate across the country. Ethanol use also increased after Congress passed the Renewable Fuel Standard (RFS) requirements of the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007, which mandates that U.S. renewable fuel use increase annually until it reaches 36 billion gallons by 2022.
The mandate was based on the assumption that U.S. gasoline consumption would continually increase, and thus be able to absorb blending of ethanol without hitting the E10 blend wall. The blend wall is the maximum ethanol blend that will not damage the engines and fuel systems of vehicles that can't use a gasoline-ethanol blend higher than E10. Gasoline consumption in 2012, 2013, and 2014 was basically at the E10 blend wall level.
The U.S. Environmental Protection Agency (EPA) administers the Renewable Fuel Standard and is developing processes and procedures outlining how ethanol blends greater than E10 can be sold. The EPA ruled in January 2011 that E15 can be used in cars and light trucks built after the 2001 model year without causing damage to the engine and fuel system. The EPA also approved a new E15 label for gasoline pumps so consumers know what fuel they are buying.
Flexible-fuel vehicles can run on fuel blends up to E85
Although almost any regular gasoline car can run on blends of ethanol up to E10, only flexible-fuel vehicles (FFV) can operate with E85 gasoline. Flexible-fuel vehicles are currently available from every major U.S. automobile manufacturer at no extra cost and are almost identical to regular gasoline vehicles, with the exception of a few modifications to the fuel system and minor engine components. There are about 2,400 fueling stations in the United States that sell E85 to the public.