    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                           MID-LEVEL ETHANOL BLENDS:
                             CONSUMER AND TECHNICAL
                                 RESEARCH NEEDS

    =======================================================================

                                    HEARING

                                   BEFORE THE

                          SUBCOMMITTEE ON ENVIRONMENT

                  COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                           TUESDAY, FEBRUARY 26, 2013

                                   __________

                                Serial No. 113-7

                                   __________

     Printed for the use of the Committee on Science, Space, and Technology

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

           Available via the World Wide Web: http://science.house.gov

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                  COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                       HON. LAMAR S. SMITH, Texas, Chair
    DANA ROHRABACHER, California         EDDIE BERNICE JOHNSON, Texas
    RALPH M. HALL, Texas                 ZOE LOFGREN, California
    F. JAMES SENSENBRENNER, JR.,         DANIEL LIPINSKI, Illinois
        Wisconsin                        DONNA F. EDWARDS, Maryland
    FRANK D. LUCAS, Oklahoma             FREDERICA S. WILSON, Florida
    RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
    MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
    PAUL C. BROUN, Georgia               DAN MAFFEI, New York
    STEVEN M. PALAZZO, Mississippi       ALAN GRAYSON, Florida
    MO BROOKS, Alabama                   JOSEPH KENNEDY III, Massachusetts
    RANDY HULTGREN, Illinois             SCOTT PETERS, California
    LARRY BUCSHON, Indiana               DEREK KILMER, Washington
    STEVE STOCKMAN, Texas                AMI BERA, California
    BILL POSEY, Florida                  ELIZABETH ESTY, Connecticut
    CYNTHIA LUMMIS, Wyoming              MARC VEASEY, Texas
    DAVID SCHWEIKERT, Arizona            JULIA BROWNLEY, California
    THOMAS MASSIE, Kentucky              MARK TAKANO, California
    KEVIN CRAMER, North Dakota           VACANCY
    JIM BRIDENSTINE, Oklahoma
    RANDY WEBER, Texas
    CHRIS STEWART, Utah
    VACANCY
                                     ------

                          Subcommittee on Environment

                                  HON. , Chair
    CHRIS STEWART, Utah                  SUZANNE BONAMICI, Oregon
    F. JAMES SENSENBRENNER, JR.,         JULIA BROWNLEY, California
        Wisconsin                        DONNA F. EDWARDS, Maryland
    DANA ROHRABACHER, California         MARC VEASEY, Texas
    RANDY NEUGEBAUER, Texas              MARK TAKANO, California
    PAUL C. BROUN, Georgia               ALAN GRAYSON, Florida
    RANDY WEBER, Texas                   EDDIE BERNICE JOHNSON, Texas

    LAMAR S. SMITH, Texas

                                C O N T E N T S

                           Tuesday, February 26, 2013

                                                                       Page
    Witness List.....................................................     2

    Hearing Charter..................................................     3

                               Opening Statements

    Statement by Representative Chris Stewart, Chairman, Subcommittee
      on Environment, Committee on Science, Space, and Technology,
      U.S. House of Representatives..................................    10
        Written Statement............................................    12

    Statement by Representative Suzanne Bonamici, Ranking Minority
      Member, Subcommittee on Environment, Committee on Science,
      Space, and Technology, U.S. House of Representatives...........    13
        Written Statement............................................    14

                                   Witnesses:

    Mr. Robert L. Darbelnet, President and CEO, American Automobile
      Association
        Oral Statement...............................................    16
        Written Statement............................................    18

    Hon. Wayne Allard, Vice President, Government Relations, American
      Motorcyclist Association
        Oral Statement...............................................    23
        Written Statement............................................    25

    Mr. Mike Leister, Member, Board of Directors, Coordinating
      Research Council
        Oral Statement...............................................    31
        Written Statement............................................    33

    Discussion.......................................................    41

                 Appendix I: Answers to Post-Hearing Questions

    Mr. Robert L. Darbelnet, President and CEO, American Automobile
      Association....................................................    56

    Hon. Wayne Allard, Vice President, Government Relations, American
      Motorcyclist Association.......................................    58

    Mr. Mike Leister, Member, Board of Directors, Coordinating
      Research Council...............................................    61

                Appendix II: Additional Material for the Record

    CRC Research on Mid-Level Ethanol Blends.........................    66

    CRC Project CM-136-09-1B.........................................    83

    Durability of Fuel Pumps and Fuel Level Senders in Neat and
      Aggressive E15, CRC Report No. 664.............................    91

    Letter to Subcommittee Chairman Chris Stewart from Matt Gruhn,
      MRAA President, Marine Retailers Association of the Americas...    96

    Letter to Hon. Lisa Jackson, Administrator, Environmental
      Protection Agency, from Hon. Wayne Allard, Vice President,
      Government Relations, American Motorcyclist Association........    98

    Letter to Subcommittee Chairman Chris Stewart from Hon. Wayne
      Allard, Vice President, Government Relations, American
      Motorcyclist Association.......................................   101

    Letter to Former Subcommittee Chairman Andy Harris from William
      Woebkenberg, Mercedes-Benz Research and Development, North
      America........................................................   104

    Memo from Coordinating Research Council, Inc.(CRC)...............   106

    Letter to Subcommittee on Environment from Renewable Fuels
      Association....................................................   108

    ``Getting It Right: Accurate Testing and Assessments Critical to
      Deploying the Next Generation of Auto Fuels,'' by Patrick B.
      Davis..........................................................   111

    Letter to Subcommittee on Environment from Algae Biomass
      Organization...................................................   113

    Letter to Subcommittee on Environment from Growth Energy.........   116

                           MID-LEVEL ETHANOL BLENDS:
                             CONSUMER AND TECHNICAL
                                 RESEARCH NEEDS

                                  ----------

                           TUESDAY, FEBRUARY 26, 2013

                      House of Representatives,
                                    Subcommittee on Environment
                   Committee on Science, Space, and Technology,
                                                        Washington, DC.

        The Subcommittee met, pursuant to call, at 2:01 p.m., in
    Room 2318 of the Rayburn House Office Building, Hon. Chris
    Stewart [Chairman of the Subcommittee] presiding.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Stewart. The Subcommittee on Environment will come
    to order. Good afternoon, everyone. Welcome to today's hearing
    entitled, ``Mid-Level Ethanol Blends: Consumer and Technical
    Research Needs.''
        Before we begin, I would like to take this opportunity to
    thank my esteemed colleague, Dr. Andy Harris, for his service
    to the Committee and to his leadership as Chairman of the
    Environment Subcommittee. We congratulate him on his
    appointment to the House Appropriations Committee but regret
    the loss of an active Member of this Committee. We thank him
    for his leadership and wish him the very best of luck in his
    new committee assignment.
        I am Chris Stewart. I am the Vice Chairman of this
    Subcommittee. I have been asked to pinch hit for Dr. Harris in
    his absence and hopefully we can stumble through this without
    too many incidents. I appreciate the presence of the witnesses
    with us today as well as other Members of the Subcommittee.
        In front of you are packets containing the written
    testimony, the biographies, and the truth in testimony
    disclosures for today's witnesses.
        I know recognize myself for five minutes for an opening
    statement.
        Welcome to this afternoon's hearing of the Environment
    Subcommittee entitled, ``Mid-Level Ethanol Blends: Consumer and
    Technical Research Needs.''
        This legislation hearing builds upon work of this Committee
    pursued last Congress involving technical aspects of the
    Environmental Protection Agency's approval of mid-level ethanol
    blends for use in certain vehicles. Relying on a single set of
    narrow tests, EPA approved fuel with up to 15 percent ethanol,
    known as E15, for use in 2001, model year and newer passenger
    vehicles. Concurrently, and for the first time in the history
    of the Clean Air Act, EPA conducted a bifurcated fuel system,
    prohibiting E15 use in all other engines and vehicles.
        Unfortunately, the more E15 is studied, the more concerns
    are identified. In addition to potential widespread impacts on
    vehicle engines, EPA has led a haphazard transition to E15
    usage, marked by regulatory confusion, bungled implementation,
    and a lack of consumer education. Today's hearing is not a
    forum to discuss whether corn ethanol is good or bad, but
    rather it is designed to answer questions like: What have we
    learned about the effects of E15 since 2010? What types of
    research would be helpful before there is more widespread use
    throughout the United States? And finally, what types of
    research and development should be required ahead of the
    introduction of new fuels in the future?
        Toward answering these questions, our witnesses will be
    commenting on discussion draft legislation in your packets.
    This bill would require that EPA contract with the National
    Academy of Sciences to assess the state of the science
    regarding E15, including research needs, gaps in understanding,
    recent testing, and consumer education efforts. This draft is
    substantially similar to H.R. 3199, bipartisan legislation co-
    sponsored by Congressman Sensenbrenner and passed
    overwhelmingly by the full Science, Space, and Technology
    Committee last year.
        That legislation was also endorsed by a diverse coalition
    of groups concerned about EPA's E15 science, including everyone
    from the Friends of the Earth and the National Turkey
    Federation to the American Petroleum Institute and Alliance of
    Automobile Manufacturers. For example, the now-President of the
    Environmental Working Group testified to this Subcommittee last
    Congress that, ``Our comprehensive review of the available
    scientific data indicates that E15 and higher ethanol blends
    could have significant adverse impacts on human and
    environmental health.''
        This hearing is focused on technical and consumer concerns
    about the potential engine damage, warranty issues, and
    misfueling associated with EPA's approval of a bifurcated
    fueling system. The Clean Air Act does not allow a waiver for a
    new fuel if it would result in the failure of emission
    standards in cars manufactured after 1974. Recent research has
    found major problems resulting from the use of mid-level
    ethanol blends. This research has identified negative impacts
    to the engine durability, on-board diagnostics, fuel pumps, as
    well as non-road marine, outdoor power equipment, and
    snowmobile engines. Additional research has shown that
    consumers are completely unaware of this dramatic change, a 50
    percent increase in the amount of ethanol per gallon, in the
    fuel they are putting in their vehicles and engines.
        Earlier this month, the National Marine Manufacturers
    Association conducted a survey that found of the 17 stations
    currently registered to sell E15 in a handful of States, six of
    those stations, fully 35 percent, had failed to label the pumps
    according to EPA's requirements. Confusion over misfueling has
    been magnified by the agency's handling of blender pumps and
    non-approved vehicles. At one point last year, EPA even
    proposed a completely impractical and unenforceable mandate
    that all customers would have to buy at least four gallons from
    any E15 blender pump. This is not promising for the widespread
    adoption of this fuel, especially as the vast majority of
    vehicles and engines in America are either not approved for the
    use of E15 or may have their warranties voided by its use.
        While EPA's Assistant Administrator Gina McCarthy has
    repeatedly stated that the agency is not currently requiring
    the use of E15, the agency has aggressively supported the
    Renewable Fuel Standard, the underlying mandate that will
    undeniably, at some point in the future, have to force fuel
    ethanol blends to exceed 10 percent. And to be clear, RFS
    further guarantees that E15 is just the tip of the iceberg. RFS
    mandates 16 billion gallons of renewable fuel be blended for
    the sale in 2013. Over the next 10 years, this requirement will
    grow to 36 billion gallons.
        This policy is looking more and more like a monument of the
    folly of central energy planning and has entailed negative
    environmental outcomes, rising food costs here in the United
    States and in third world countries, and even outright fraud
    involving biofuel credits. This absurdity was demonstrated late
    last week when Ms. McCarthy, reportedly expected to be
    nominated for EPA Administrator, expressed excitement at her
    ``personal milestone,'' that the first credit for cellulosic
    ethanol had just been issued. What she failed to mention is
    that her agency had mandated 8.65 million gallons of this
    phantom fuel be paid for by consumers in 2012, even though
    virtually none existed.
        To reiterate, this hearing will not examine the RFS, but
    rather focus on its downstream impacts related to the technical
    and consumer research needed on the effects of E15 on all
    engines, as well as explore a potential path forward that is
    based on science and expert testing, not on politics. As our
    witnesses today will testify, there is increasing evidence that
    American consumers may have to pay the price for EPA's cart-
    before-the-horse approach to E15 science.
        [The prepared statement of Mr. Stewart follows:]

           Prepared Statement of Subcommittee Chairman Chris Stewart

        Welcome to this afternoon's hearing of the Environment Subcommittee
    entitled ``Mid-Level Ethanol Blends: Consumer and Technical Research
    Needs.''
        This legislative hearing builds upon work this Committee pursued
    last Congress involving technical aspects of the Environmental
    Protection Agency's approval of mid-level ethanol blends for use in
    certain vehicles. Relying on a single set of narrow tests, EPA approved
    fuel with up to 15 percent ethanol--known as E15--for use in 2001
    model-year and newer passenger vehicles. Concurrently, and for the
    first time in the history of the Clean Air Act, EPA created a
    birfurcated fuel system, prohibiting E15 use in all other engines and
    vehicles.
        Unfortunately, the more E15 is studied, the more concerns are
    identified. In addition to potential widespread impacts on vehicle
    engines, EPA has led a haphazard transition to E15 usage, marked by
    regulatory confusion, bungled implementation, and a lack of consumer
    education. Today's hearing is not a forum to discuss whether corn
    ethanol is good or bad; rather, it is designed to answer questions
    like: What have we learned about the effects of E15 since 2010? What
    types of research would be helpful before there is more widespread use
    throughout the United States? Finally, what types of research and
    development should be required ahead of the introduction of new fuels
    in the future?
        Toward answering those questions, our witnesses will be commenting
    on discussion draft legislation in your packets. This bill would
    require that EPA contract with the National Academy of Sciences to
    assess the state of the science regarding E15, including research
    needs, gaps in understanding, recent testing, and consumer education
    efforts. This draft is substantially similar to H.R. 3199, bipartisan
    legislation sponsored by Congressman Sensenbrenner and passed
    overwhelmingly by the full Science, Space, and Technology Committee
    last year.
        That legislation was also endorsed by a diverse coalition of groups
    concerned about EPA's E15 science, including everyone from Friends of
    the Earth and the National Turkey Federation to the American Petroleum
    Institute and the Alliance of Automobile Manufacturers. For example,
    the now-President of the Environmental Working Group testified to this
    Subcomiittee last Congress that ``Our comprehensive review of the
    available scientific data indicates that E15 and higher ethanol blends
    could have significant adverse impacts on human and environmental
    health.''
        This hearing is focused on technical and consumer concerns about
    the potential engine damage, warranty issues, and misfueling associated
    with EPA's approval of a bifurcated dueling system. The Clean Air Act
    does not allow a waiver for a new fuel if it would result in the
    failure of emission standards in cars manufactured after 1974. Recent
    research has found major problems resulting from the use of midlevel
    ethanol blends. This reserach has identified negative impacts to engine
    durability, on-board diagnostics, fuel pumps, as well as nonroad
    marine, outdoor power equipment, and snowmobile engines. Additional
    research has shown that consumers are completely unaware of this
    dramatic change--a 50 percent increase in the amount of ethanol per
    gallon--in the fuel they are putting in their vehicles and engines.
        Earlier this month, the National Marine Manufacturers Association
    conducted a survey that found that, of the 17 stations currently
    registered to sell E15 in a handful of States, six of those stations--
    35 percent--had failed to label the pumps according to EPA's
    requirements. Confusion over misfueling has been magnified by the
    Agency's handling of blender pumps and nonapproved vehicles; at one
    point last year, EPA even proposed a completely impractical and
    unenforceable mandate that all customers would have to buy at least
    four gallons from any E15 blender pump. This is not promising for the
    widespred adoption of this fuel, especially as the vast majority of
    vehicles and engines in America are either not approved for the use of
    E15 or may have their warranties voided by its use.
        While EPA's Assistant Administrator Gina McCarthy has repeatedly
    stated that the Agency is not currently requiring the use of E15, the
    Agency aggressively supports the Renewable Fuel Standard--the
    underlying mandate that will, undeniably, at some point in the future
    have to force fuel ethanol blends to exceed 10 percent. And to be
    clear--the RFS further guarantees that E15 is just the tip of the
    iceberg. The RFS mandates 16 billion gallons of renewable fuel be
    blended for sale in 2013. Over the next 10 years, this requirment will
    grow to 36 billion gallons.
        This policy is looking more and more like a monument to the folly
    of central energy planning, and has entailed negative environmental
    outcomes, rising food costs here in the United States and in third-
    world countries, and even outright fraud involving biofuel credits.
    This absurdity was demonstrated late last week, when Ms McCarthy--
    reportedly expected to be nominated for EPA Administrator--expressed
    excitement at her ``personal milestone'' that the first credit for
    cellulosic ethanol had just been issued. What she failed to mention is
    that her Agency had mandated 8.65 million gallons of this phantom fuel
    be paid for by consumers in 2012, even though virtually none existed.
        To reiterate, this hearing will not examine the RFS but rather
    focus on its downstream impacts related to the technical and consumer
    research needed on the effects of E15 on all engines, as well as
    explore a potential path forward that is based on science and expert
    testing, not politics. As our witnesses today will testify, there is
    increasing evidence that American consumers may have to pay the price
    for EPS's cart-before-the-horse approach to E15 science.

        Chairman Stewart. I would now like to recognize the Ranking
    Member, the gentlewoman from Oregon, Ms. Bonamici, for an
    opening statement.
        Ms. Bonamici. Thank you very much, Chairman Stewart.
        Renewable fuel from biomass, specifically corn-based
    ethanol, is a complex issue, and as this hearing demonstrates,
    the ethanol content in our Nation's fuel supply has been the
    subject of much debate. In this Committee, we often cover
    policy areas about which there is disagreement in basic
    ideology and world view.
        But when we are faced with issues on which there is
    agreement, we should recognize that and work toward consensus
    solutions.
        For example, the Renewable Fuels Standard was first
    included in an energy bill that passed the House and the Senate
    with bipartisan support. That is a statement we don't say
    frequently enough. One thing that many of us do say frequently
    is that we need to put this Nation on a path toward energy
    independence. Our reliance on foreign oil causes concerns in
    every sector, businesses and consumers worry about constantly
    fluctuating prices at the pump, our generals see a strategic
    disadvantage to relying on resources provided by countries with
    which we have experienced significant conflict, and many of our
    constituents rightly worry that continuing our current use of
    fossil fuels will harm our fragile environment.
        The Renewable Fuel Standard represents a bipartisan
    acknowledgement of the role that alternative fuels play in
    reducing our dependence on foreign oil. From my time in the
    Oregon legislature, I know well the concerns that some have
    about blend levels in gasoline, and I know that various States
    have made exceptions to accommodate these concerns. It makes
    sense to fully understand the impacts of our renewable policies
    before requiring consumers to comply.
        What does not make sense, however, is refusing to address
    the problem altogether. The blend wall should not be a reason
    to give up on renewable fuels. It should be a reason to promote
    technology that will meet the growing supply of renewables.
    Advanced ethanol, cellulosic biomass, and developments in these
    fields are only going to increase the supply of blended fuels
    in the market, and these advancements will help us bring--come
    further toward energy security.
        This hearing is supposed to examine, among other things,
    scientific, technical, and consumer impacts of EPA's decision
    to allow introduction by waiver of E15 in the market, and that
    is to allow, not to require. And we will also take comments on
    a draft bill that Mr. Sensenbrenner is circulating that would
    prevent the EPA from complying with its Congressionally
    mandated responsibilities under the Clean Air Act until
    additional research is performed on E15.
        The Department of Energy conducted much of the science that
    the EPA used in making its waiver decision. Although I agree
    that the EPA should not base decisions on incomplete
    information, neither should this Committee. I am concerned that
    in the hearing charter and in the witness testimony, the main
    literature that is being used to refute the EPA's science on
    E15 is being provided by a group that is largely financed by
    the American Petroleum Institute and several automobile
    manufacturers
        In a Committee where science is paramount, I find it
    perplexing that the scientific studies we are discussing were
    largely funded by the oil industry, which has an obvious
    financial stake in the outcome, and this context is also worth
    pointing out at the outset that following the release of the
    study from the Coordinating Research Council, the Department of
    Energy did release a response questioning the methodology of
    the research.
        Clean and sustainable renewable fuels are already part of
    our economy. Investing in clean and renewable energy has and
    will continue to create jobs, reduce our impact on climate
    change, reduce our reliance on foreign fossil fuels, and
    strengthen our national security. We should work toward
    realizing a future of producing home-grown renewable fuels, and
    to meet that challenge, it is this Committee's responsibility
    to focus on the science and technology that will help get our
    country on the road to a sustainable energy future.
        With that, I look forward to all of the witnesses'
    testimony and to what I hope will be a productive discussion
    about the scientific and technological implications of
    alternative fuels.
        Thank you, Mr. Chairman, and I yield back.
        [The prepared statement of Ms. Bonamici follows:]

       Prepared Statement of Subcommittee Ranking Member Suzanne Bonamici

        Thank you, Chairman Stewart. Renewable fuel from biomass,
    specifically corn-based ethanol, is a complex issue. And, as this
    hearing demonstrates, the ethanol content in our Nation's fuel supply
    has been the subject of much debate.
        In this Committee, we often cover policy areas about which there is
    disagreement in basic ideology and world view. But when we are faced
    with issues on which there is agreement, we should recognize that and
    work toward consensus solutions. For example, the Renewable Fuels
    Standard was first included in an energy bill that passed the House and
    Senate with bipartisan support. That is a statement we don't say
    frequently enough.
        One thing that many of us do say frequently is that we need to put
    this Nation on a path toward energy independence. Our reliance on
    foreign oil causes concern in every sector. Businesses and consumers
    worry about constantly fluctuating prices at the pump. Our Generals see
    a strategic disadvantage to relying on resources provided by countries
    with which we have experienced significant conflict. And many of our
    constituents rightly worry that continuing our current use of fossil
    fuels will harm our fragile environment.
        The Renewable Fuels Standard (RFS) represents a bipartisan
    acknowledgment of the role that alternative fuels play in reducing our
    dependence on foreign oil. From my time in the Oregon legislature, I
    know the concerns that some have about blend levels in gasoline, and I
    know that various States have made exceptions to accommodate these
    concerns. It makes sense to fully understand the impacts of our
    renewable policies before requiring consumers to comply. What does not
    make sense, however, is refusing to address the problem altogether. The
    ``blend wall' should not be a reason to give up on renewable fuels; it
    should be a reason to promote technology that will meeet the growing
    supply of renewables. Advanced ethanol, cellulosic biomass,
    developments in these fuels are only going to increase the supply of
    blended fuels on the market. Those advancements will help bring us
    further toward energy security.
        This hearing is supposed to examine--among other things--
    scientific, technical, and consumer impacts of EPA's decision to allow
    introduction of E15 in the market. And we will also take comments on a
    draft bill that Mr. Sensenbrenner is circulating that would prevent the
    EPA from complying with its Congressionally mandated responsibilities
    under the Clean Air Act until additional research is performed on E15.
        The Department of Energy conducted much of the science that the EPA
    used in making its waiver decision. Although I agree that the EPA
    should not base decisions on incomplete information, neither should
    this Committee. I am concerned that in the Hearing Charter and in the
    witness testimony, the main literature that is being used to refute the
    EPA's science on E15 is being provided by a group that is largely
    financed by the American Petroleum Institute and several automobile
    manufacturers. In a Committee where science is paramount, I find it
    perplexing that the scientific studies we are discussing were largely
    funded by the oil industry, which has an obvious financial stake in the
    outcome of this debate.
        Also, because the Department of Energy conducted the research on
    which the EPA based its decision, it is important to note for the
    record that the Majority invited neither the Department of Energy nor
    the Environmental Protection Agency to discuss the science and
    extensive testing on which EPS based its decision.
        Clean and sustainable renewable fuels are already a part of our
    economy. Investing in clean and renewable energy has and will continue
    to create jobs, reduce our impact on climate change, reduce our
    reliance on foreign fossil fuels, and strengthen our national security.
    We should work toward realizing a future of producing home-grown
    renewable fuels. To meet that challenge, it is this Committee's
    responsibility to focus on the science and technology that will help
    get our country on the road to a sustainable energy future.
        With that, I look forward to all of the witnesses' testimony and to
    what I hope will be a productive discussion about the scientific and
    technological implications of alternative fuels.

        Chairman Stewart. Thank you, Ms. Bonamici.
        If there are other Members who wish to submit additional
    opening statements, your statements will be added to the record
    at this point.
        At this time I would like to introduce the witnesses.
        Our first witness is Mr. Robert L. Darbelnet, the President
    and CEO of American Automobile Association, known to most of us
    as AAA. Mr. Darbelnet has become AAA President and CEO in
    November 1994, after serving 11 years as CEO of the Canadian
    Automobile Association in Quebec. He currently serves as
    Chairman of the Global Mobility Alliance and Trustee of the AAA
    Foundation for Traffic Safety.
        Our next witness is the Honorable Wayne Allard, Vice
    President of Government Relations for the American Motorcyclist
    Association, or AMA. He previously served from 1997 to 2009 as
    a U.S. Senator for the State of Colorado. Senator Allard served
    as the Ranking Member of the Interior Subcommittee of the
    Senate Appropriations Committee. Before that, Senator Allard
    was a Member of the U.S. House of Representatives from 1991 to
    1997.
        And the final witness today is Mr. Mike Leister, a member
    of the Board of the Directors of the Coordinating Research
    Council. He chairs the American Petroleum Institute Fuels
    Subcommittee and is a member of the API Economics Work Group
    and belongs to the American Fuels and Petrochemical
    Manufacturers Fuels Advisory Subcommittee. Mr. Leister has a
    Master's of Science in chemical engineering and a Master's of
    Business Administration.
        As our witnesses should know, spoken testimony is limited
    to five minutes each, after which the Members of the Committee
    will have five minutes each to ask questions.
        I would now like to recognize Mr. Darbelnet for five
    minutes to present his testimony.

                 STATEMENT OF MR. ROBERT L. DARBELNET,

                           PRESIDENT AND CEO,

                    AMERICAN AUTOMOBILE ASSOCIATION

        Mr. Darbelnet. Thank you very much, Mr. Chairman. It is a
    pleasure to be here on behalf of AAA to share our views on this
    issue. I realize that you and your colleagues often deal with
    extremely complex questions, but the subject matter before us
    today is really quite simple, and that is that allowing the
    sale of E15 at this point in time is premature and
    irresponsible.
        In our view, there are three prerequisites for the
    introduction of a new fuel. The first one is adequate testing
    to ensure that the product that is being brought to market is
    safe. In this instance, that has not occurred. Granted, the EPA
    has conducted extensive testing, but the focus of that testing
    has been on the impact of E15 on emission controls, not on the
    broader effect of the product on the engine itself.
        Industry testing reveals true and genuine concerns, and you
    will hear more about that later this afternoon, but clearly
    from our research or our review of the research, I should say,
    premature engine wear, potential fuel pump failures, and a
    series of other less-significant consequences can occur if this
    fuel is used in vehicles that were manufactured more recently
    than last year. Even the Renewable Fuel Association advises
    retailers to beware of the dangers and the damage that can
    result from putting E15 in underground storage systems. They
    speak of possible leaks and fires. Clearly there is something
    here.
        The second requirement, in our view, for introducing a new
    fuel to market is coordination between regulators, fuel
    retailers, and auto manufacturers. Now, the record is clear in
    that that has not occurred. A number of the retailers in this
    country are opposed to the sale of E15 and at the present time
    do not intend to bring it to market. Virtually every OEM or
    auto manufacturer in this country has indicated that using E15
    in vehicles that were manufactured more recently than last
    year, with the exception of Porsches, will tell you that you
    could use it in a vehicle that is older than that, virtually
    all of the OEMs have said do not put this fuel in your tank
    unless you are accepting of the fact that it will void your
    warranty.
        And the third requirement for introducing a new product is
    outreach to consumers to mitigate the risk of misfueling, and
    that hasn't occurred either. Again, the record is clear. We
    conducted research recently that shows that 95 percent, 95
    percent of the motoring public in this country does not know
    what E15 is, let alone whether they should be putting it in the
    tank of their vehicle.
        And to further complicate matters, the EPA ceded to
    pressures to tone down the message on the warning label which,
    incidentally, is rather small and generally lost in all of the
    advertising which is on today's fuel pumps, but they agreed to
    tone down the message on that label from what was initially
    contemplated and would have started with the word ``warning''
    to something less significant, in other words, ``attention.''
        Now, I want to make clear the fact that AAA is not opposed
    to ethanol for automobiles. E10 is compatible with almost every
    vehicle on the road today. Automobiles, I should say, because
    you will hear from my colleagues that the same is not true for
    other types of vehicles. But for automobiles, E10 is safe. Our
    issue is not with ethanol. We see the benefit of reduced
    dependency on fossil fuel, we see the benefit of bringing to
    market alternative options for consumers.
        However, as I said at the outset, the sale of E15 at this
    point in time is irresponsible, and it should cease until
    adequate testing allows regulators, retailers, and auto
    manufacturers to reconcile their viewpoints to agree on which
    vehicles can safely consume E15, and to make sure that the
    consumer is adequately informed of the risks that follow the
    use of E15 in today's automobiles.
        Thank you very much.
        [The prepared statement of Mr. Darbelnet follows:]

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        Chairman Stewart. Thank you, sir.
        I now recognize Senator Allard for five minutes for his
    testimony.

                    STATEMENT OF HON. WAYNE ALLARD,

                 VICE PRESIDENT, GOVERNMENT RELATIONS,

                   AMERICAN MOTORCYCLIST ASSOCIATION

        Mr. Allard. Thank you, Mr. Chairman, and I want to
    congratulate you on Chairing your first Committee.
        Chairman Stewart. Thank you. It is really quite exciting.
        Mr. Allard. Acting Chairman Chris Stewart and Ranking
    Member Suzanne Bonamici and Members of the Subcommittee, thank
    you for the opportunity to provide comment on ``Mid-Level
    Ethanol Blends: Consumer and Technical Research Needs.''
        I was in public office for 26 years, but I still shake my
    head over the ability of the Federal Government to reach, or
    maybe I should say overreach, into the lives of the American
    people and the power wielded by bureaucrats to do so.
        One case in point is E15, a gasoline formulation that
    contains up to 15 percent ethanol by volume, which could damage
    motorcycle and all-terrain vehicle engines.
        The American Motorcyclist Association believes extensive,
    independent testing needs to be done before E15 becomes more
    widely available. The key for the AMA and our members is that
    E15 must be proven safe for motorcycle and ATV engines. To the
    best of our knowledge, E15 is not approved for use in any
    original-equipment motorcycles or ATVs, and in fact, its use
    can void many manufacturer's warranties.
        As of today, the U.S. Environmental Protection Agency has
    only approved the use of E15 in model year 2001, and newer
    cars, light-duty trucks, and medium-duty passenger vehicles.
    This list does not include motorcycles or ATVs.
        How is the Federal Government going to prevent
    motorcyclists from inadvertently putting E15 in our gas tanks
    or gas cans when getting gas at a blender pump with a single
    hose?
        Here is what the EPA--here is where the EPA overreached.
    Initially, the EPA decided that you must buy at least four
    gallons of gas from that blender pump. Not one gallon, not two
    gallons, not three gallons. Yes, the government mandated you
    buy at least four gallons to dilute the residual E15 in the
    hose.
        The EPA revealed the four-gallon minimum mandate to the AMA
    in a letter last August responding to AMA concerns that E15
    could be put in motorcycle and ATV gas tanks inadvertently when
    consumers use blender pumps. Unlike an automobile or SUV that
    has a large fuel tank, the residual fuel left in a fueling hose
    could be detrimental to the performance of motorcycle or ATV
    engines due to the small size of their fuel tanks and the
    higher concentration of ethanol that would, therefore, be
    present in the fuel.
        In addition, the use of E15 will lower fuel efficiency and
    possibly cause premature engine failure. In off-road engines,
    the effect can even be dangerous for users.
        Another problem with that new EPA policy is that not all
    motorcycle and ATV gas tanks hold four gallons or more gallons.
    Not only did we find it unacceptable for the EPA to mandate
    that everyone, including our members, buy minimum amounts of
    gas, but that the EPA answer simply would not work because of
    the sizes of many motorcycle and ATV gas tanks and the fact
    that off-highway riders take containers of gas with them on
    their trips. Most times these containers are much smaller than
    four gallons.
        We stress that the EPA needed to come up with a better
    solution, so on February 7, in response to concerns expressed
    by the AMA and power equipment makers, the EPA issued new
    guidelines to help ensure that motorcyclists and others don't
    inadvertently use E15 fuel.
        Under the new option, retailers who use a blender pump to
    see E15 and E10 fuel through the same hose must also have a
    separate E10/E0 fuel pump. Those retailers would be required to
    have a label on the blender pump that reads passenger vehicles
    only. Use in other vehicles, engines, and equipment may violate
    federal law.
        Retailers would also be required to have signs indicating
    the location of the dedicated E10 or lower fuel pump. There
    would be no minimum fuel purchase requirement at that pump.
        Now, we can only imagine how many motorists and
    motorcyclists will be lining up at that single pump to get E10
    or lower fuel. Retailers who want to sell E15 also have the
    option of having a dedicated E15 pump or hose or a pump that
    dispenses E15 and higher ethanol blends through a single hose.
    If a blender pump dispenses multiple fuels that include E15 and
    higher ethanol blends, the EPA may require a minimum purchase
    requirement.
        The AMA has repeatedly expressed concerns to government
    officials and federal lawmakers about possible damage to
    motorcycle and ATV engines caused by the inadvertent use of E15
    when the new fuel becomes widely available. The AMA has also
    asked that motorcycles and ATVs be part of any scientific study
    into the effects of E15 to ensure that the new fuel blend would
    not damage those engines.
        It is my sincere hope that this Subcommittee continues to
    be proactive on this important issue affecting motorcyclists
    and ATV riders. The AMA and its members stand ready to serve as
    a resource for you and your staff as you further deliberate
    making our Nation's fuel supply safer for all users.
        Again, I wish to thank the Chairman, the Ranking Member,
    and the Subcommittee for holding this legislative hearing on
    E15.
        [The prepared statement of Mr. Allard follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Stewart. Thank you, Senator. On a personal note, I
    will note that your home State of Colorado is almost as
    beautiful as my home State of Utah, and I look forward to
    joining you on your next motorcycle ride through the land.
        I now recognize Mr. Leister for his testimony.

                     STATEMENT OF MR. MIKE LEISTER,

                      MEMBER, BOARD OF DIRECTORS,

                     COORDINATING RESEARCH COUNCIL

        Mr. Leister. Good afternoon. Thank you for inviting me here
    today to testify on mid-level ethanol research programs
    conducted by the Coordination Research Council, CRC. I am a
    Senior Fuels Policy Advisor for Marathon Petroleum Corporation,
    but today I am here to represent CRC. I am currently a member
    of the CRC Board of Directors, and I am a past President of the
    Board.
        CRC is a research organization that has been around for
    more than 70 years. You may not have heard of it much before,
    but it has done significant research throughout the two World
    Wars and since then. About two-thirds of the CRC budget is paid
    for by automobile manufacturers and the American Petroleum
    Institute. The remaining funding is paid for on a project-by-
    project basis by outside organizations. CRC is the gold
    standard of vehicle and fuels research.
        In recent years, the U.S. Environmental Protection Agency,
    the U.S. Department of Energy, the California Air Board, the
    National Renewable Energy Lab, and even the Renewable Fuels
    Association and Growth Energy have contributed significant
    funds to CRC research projects.
        I would like to stress at the outset that my testimony for
    CRC does not engage in any advocacy. CRC stays out of advocacy.
    We try to conduct straightforward research and report the facts
    that have been learned. CRC leaves it to other parties to apply
    political interpretation to these results. My written testimony
    has some additional background on CRC.
        Shortly after the enactment of the Energy Independence and
    Security Act of 2007, the auto, oil industries, and even DOE
    and EPA recognized that substantial research was needed to
    assess the compatibility of higher-level ethanol blends with
    existing vehicles and small engines. The Coordinating Research
    Council developed and funded a comprehensive, multi-year
    testing program. In the early stages of this program, DOE and
    NREL participated in the design of various projects and even
    helped write some of the preliminary reports. The CRC has spent
    close to $14 million looking at mid-level ethanol blends
    research over the past years, and we are committed to finishing
    the projects that we have underway.
        Attachment One of my testimony lists the CRC programs and
    their schedules. The chief programs in this area are, first of
    all, the durability of the engine itself, particularly engine
    valves and valve seats. That program has been completed. The
    durability of the vehicle onboard fuel storage and handling
    equipment. That project has also been completed. The
    computerized onboard diagnostic system, or OBD, which the
    driver often sees as the check engine light coming on and off,
    that project is still ongoing, and finally, the last major part
    of our research has been the vehicle evaporative emissions
    control system, which minimizes the release of fuel vapors to
    the atmosphere, and that project has been completed.
        This comprehensive set of test programs will be completed
    this spring with the OBD Program being completed. However, the
    test results on at least two of the programs, the engine
    durability and the fuel system durability, suggest that E15 has
    the potential to damage millions of vehicles in the current
    U.S. fleet.
        CRC, along with EPA and DOE, participated in all eight of
    the mid-level ethanol stakeholder meetings that have been held
    since May of 2008. On each occasion, we shared our research
    schedule and preliminary test results. However, EPA chose to
    ignore this research. Instead of waiting for CRC studies to be
    completed and thoroughly evaluated, EPA improperly used data
    from a DOE catalyst durability program and drew conclusions
    about E15 effects that the DOE Program was simply not designed
    to evaluate.
        My testimony today will highlight the results of the CRC
    E15 research on engine durability and fuel system durability.
        On engine durability, that research demonstrated that E15
    and E20 could cause engine damage, specifically excess valve
    and seat wear under certain driving conditions in some of the
    existing vehicles that were expected to be sensitive to ethanol
    concentrations. Two out of eight models tested in the program
    failed on E15 and E20 but not on E0. The failures that occurred
    were compression failures, and they can result in the loss of
    power, increased emissions, and high repair costs for the
    consumer.
        On fuel system durability, the research identified an
    elevated incidence of fuel pump failures, fuel system component
    swelling, impairment of the fuel level measurements in some of
    the vehicles tested. E15 can cause erratic and misleading fuel
    gauge readings and cause improper check engine light
    illuminations. Fuel pump failures will stop the flow of fuel to
    the engine, which can result in breakdowns on the highway or
    busy streets. A fuel system components problems did not develop
    when CRC tested E10 or E0 on these components.
        Discovering these problems was not really very surprising,
    because valve and valve seat upgrades are typically what an
    auto manufacturer does to make a vehicle E85 compatible. Fuel
    pumps and level sender problems are also not surprising,
    because these components also are typically upgraded to make
    flex fuel vehicles for E85.
        I would like to point out that CRC only tested a small
    sample of vehicles, engines, and components in the current U.S.
    vehicle fleet, and that most of the sampled vehicles, engines,
    and components demonstrated no problem with E15; however, the
    problems uncovered represent serious concerns over the useful
    life of millions of the vehicles in the current fleet. Until
    2012, no vehicles in the U.S. fleet, except for flex fuel
    vehicles, were really designed to handle E15, so it was not
    surprising these problems were found.
        CRC simply believes that the research demonstrates that
    millions of the vehicles, engines, or components in the U.S.
    fleet could be damaged by E15.
        Thank you.
        [The prepared statement of Mr. Leister follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Stewart. I would like to thank the three of you
    for your sacrificing your service and making yourselves
    available to us today for your questions and your expertise.
        Reminding the Members that Committee rules limit
    questioning to five minutes.
        The Chair at this point would open the round of
    questioning, and the Chair recognizes himself for five minutes.
        A concern that I think many of us have, and this is
    bipartisan, it is something that I think is unanimous
    throughout, you know, leadership in government and that is the
    risk of unfunded mandates from the Federal Government, where
    rules and regulations may be imposed without authorizing any
    funds to offset the actual cost of those rules or regulations.
        And I think this may be a potentially good example of that,
    and, again, it would be bipartisan if that were the case. If we
    were to start receiving calls from our constituents who had
    significant damage to what would for many of them be one of the
    largest investments they are making short of a home or some
    others, the automobile that they drive, and if they did receive
    damage from that because of these rules, my question to you is,
    who is liable if the consumer were to experience engine damage
    because of the use of E15 in engines?
        And I think you have answered the question, but if you feel
    like you would elaborate, what is the likelihood of that
    happening, and you know, what would you do to recommend that we
    avoid that situation?
        Maybe, Mr. Darbelnet, we could begin with you.
        Mr. Darbelnet. Certainly. Thank you for that question.
        Clearly, the liability that would result from that
    occurring should not rest with the consumer. At the same time,
    none of the other parties that seem to have an interest in
    making E15 available are willing to step forward and assume
    liability. In fact, there have been efforts on their part to
    avoid liability, which I think is an indication of their
    recognition that there is an issue here that needs to be dealt
    with.
        I think we should also observe that the damage that we are
    concerned about is probably going to occur over a period of
    time, and so we will not immediately discover the full
    magnitude of the problem, and by the time it is apparent, I
    suspect it is going to be difficult to trace back the problems
    of the fuel that may have led to the damage, because if you
    have been driving for a year or two and using this fuel and you
    have damage, was it when you bought it at service station A or
    when you bought it at service station B or service station C?
    So really what we need to do is to adequately test it before we
    make it available for sale. That is the solution.
        Chairman Stewart. Well, I just have to interject. I am just
    shocked that no one is stepping forward to claim responsibility
    for this potential liability, but of course, they wouldn't, and
    like you said, it is ambiguous and difficult to determine in
    some cases.
        Would either of the two of you like to address the same
    question?
        Mr. Allard. Mr. Chairman, I would just comment that we
    don't recommend to our members that they purchase a motorcycle
    that is not covered by a manufacturer's warranty, and when
    these are covered by warranty, in all clear conscience we can
    recommend that they buy that fuel or buy that engine or
    whatever.
        So those warranties are put out there to protect the
    consumer any liability that they may assume.
        Chairman Stewart. And I would just hope that the
    legislation considers the impacts of that and that we don't
    leave our constituents with a significant liability that they
    have no means of controlling.
        Mr. Leister, would you like to address that question as
    well?
        Mr. Leister. I think Mr. Darbelnet----
        Chairman Stewart. Let me ask just very quickly if we have
    time for this. Why is the testing of the Coordinated Research
    Council conducted better or more appropriate than the EPA
    relied on? Are there differences in the underlying studies.
        Yes.
        Mr. Darbelnet. You appear to be looking at me, but I might
    want to defer the question to someone else. However, I would
    offer that we haven't really challenged the EPA research on the
    basis of did they spend enough time looking at the effect of
    the fuel. Our concern with their research is the scope. It is
    my understanding that what they were looking at was the effect
    of E15 on emission control systems. They did not address the
    effect of E15 on the other components of the engine that were
    discussed by one of the previous testimonies.
        Mr. Leister. Basically, the EPA testing was an attempt to
    try to figure out whether E15 was a problem in vehicles. There
    was a vast lack of knowledge in this area. The fact that they
    chose to maybe not run as strenuous a test as necessary doesn't
    degrade from the fact that they did a test, but it really
    wasn't designed to test the whole vehicle, as Mr. Darbelnet
    just discussed.
        The CRC Program was actually designed by auto
    manufacturers, and the tests were what auto manufacturers would
    use to test their own equipment before they would sell it to
    the public, and as that, it had a higher standard than EPA
    developed for their tests.
        Chairman Stewart. All right. Thank you.
        I now recognize Ms. Bonamici for five minutes for her
    questioning.
        Ms. Bonamici. Thank you very much, Mr. Chairman, and thank
    you to the witnesses. Before I begin my questioning I just
    wanted to say a word about the witnesses and the hearing
    record. Because the Department of Energy conducted the research
    on which the EPA based its decision to grant the E15 waivers,
    it is important to note for the record that the majority
    invited neither the Department of Energy nor the EPA to discuss
    the science and extensive testing on which the EPA based its
    decision.
        In addition, since the Department of Energy released a
    critique of the study performed by the Coordinating Research
    Council, the group that Mr. Leister is here representing, this
    conversation would have benefited from a Department of Energy
    presence on the panel.
        Unfortunately, the Democratic Subcommittee staff got word
    of Mr. Leister's appearance at this hearing at such a late hour
    that inviting the Department wasn't an option for us.
        So, accordingly, I am planning to submit various materials
    for the record that help to represent an alternative viewpoint
    in this debate. Although they don't necessarily represent the
    views of all of the Democrats on this Committee, it should help
    bring some balance to the record.
        I wanted to ask, just to establish for the record, and I
    think Mr. Darbelnet, perhaps you would have the answer to this,
    do you know how many gas stations there are in the United
    States?
        Mr. Darbelnet. I don't know the exact number, but there
    are----
        Ms. Bonamici. Approximately.
        Mr. Darbelnet [continuing]. Thousands and thousands and
    thousands. Probably, let us say, 100,000 or more.
        Ms. Bonamici. About 100,000.
        Mr. Leister. One hundred and sixty-nine thousand.
        Ms. Bonamici. Thank you, Mr. Leister. Do you know how many
    of them are selling E15?
        Mr. Darbelnet. My understanding is that there might be
    somewhere between 10 and 20, the number I heard most recently
    was 18, that are currently selling it, which is precisely why
    we think this ought to be addressed now. It is going to be easy
    to stop when it is only 18. It will be difficult to stop when
    it is 100,000.
        Ms. Bonamici. Thank you. I just think it is important to
    establish for the record that we are talking about somewhere
    around a dozen and a half out of hundreds of thousands. So just
    for the record.
        And, Mr. Darbelnet, I know the AAA, of which I am a proud
    member, is an organization focused on benefits of membership,
    peace of mind on the road, money saver, and that is, I think,
    something that we all appreciate. I am sure that you hear
    frequently from your members, as I do from my constituents,
    about the high price of gasoline, and I know that studies have
    shown that drivers can save up to 83 cents per gallon because
    of increased ethanol production.
        So I just wonder about motorists who drive cars that even
    manufacturers say can use E15. Should they be allowed the
    option of buying E15 and setting aside the uniqueness of places
    like Oregon and New Jersey where we are not allowed to pump our
    own gas? It is very quaint, but that puts it in a different----
        Mr. Darbelnet. Well, thank you for that question and for
    your support of AAA as a member. With regard to the potential
    savings per gallon, the numbers that I have seen are far less
    than 83 cents per gallon. There may be some unique
    circumstances that you are aware of that would cause the
    differential to be of that magnitude, but the indications we
    have are that if it is not price parity, the savings is quite
    modest, and if one factors in the lesser miles per gallon
    traveled with E15 than with E10 or pure gasoline, the savings
    is then reduced because you are not getting as many miles per
    gallon for the gallon that you bought.
        However, clearly we are in favor of options for consumers.
    Our concern currently is not that E15 should never be brought
    to market. Our concern is that the consumers do not know
    whether they should put E15 in their vehicle or not, and there
    is a huge difference of opinion between the EPA that says you
    can use it in any vehicle manufactured after 2001, and the
    people who actually make the cars who say that it shouldn't be
    used in virtually 95 percent of the vehicles that are on the
    roads today.
        And it seems to me that with your assistance, we owe it to
    the traveling public to reconcile viewpoints from the auto
    manufacturers and the EPA so the consumer is not caught in the
    middle not knowing who to believe.
        Ms. Bonamici. Thank you, and I truly believe also in
    consumer education.
        I want to ask Mr. Leister, while we have time, when the
    Coordinating Research Council put out the study on the
    automobile impact of E15, the Department of Energy did point
    out some problems that they found with the research. I know
    that Department of Energy's Vehicle Technology's Program
    presented an analysis that concluded that the methodologies
    were significantly flawed in their words.
        It is my understanding, for example, that no engines were
    tested with E10, which represents more than 90 percent of the
    gas in the United States, and at least one of the tested
    automobiles is already the subject of a recall involving valve
    problems.
        So can you describe to us how this CRC study compared in
    terms of scope with the Department of Energy testing? For
    example, the number of vehicles, the number of miles driven,
    and did the Energy Department's critique cause you to revisit
    your methodology?
        Mr. Leister. Certainly the Energy Department's critique
    caused us to relook at our program, and API has issued a letter
    that you can reference. I believe it was sent to the Committee
    here, outlining various rebuttals there. CRC will just stick to
    the facts here. DOE decided to do basically a catalyst
    emissions test. They ran the vehicles to get the catalyst hot
    enough to get an equivalent life over the life of the vehicle.
    That is not a very strenuous test, and it is not even the way
    the average public drives their cars.
        CRC, because there is no standard test for engine
    durability, took the advice of the various auto manufacturers
    that are members of CRC and developed a composite test based on
    their experience, and those tests did show some compression
    leakage, but more important than that, the compression leakage
    that we determined wasn't the final result. The compression
    leakage was a signal for us to send the vehicles back to the
    manufacturers. So each manufacturer got their own vehicle back,
    tore it apart, and looked at it, and it was only two out of the
    eight that actually had a problem with the valve seats.
        As far as the vehicles being under a recall, I am not aware
    that any of the vehicles we tested were under a recall for a
    valve problem.
        Ms. Bonamici. Thank you, and my time has expired.
        Thank you, Mr. Chairman.
        Chairman Stewart. I thank the Ranking Minority Member, Ms.
    Bonamici.
        The Chair would like to note for the record that the
    minority had the opportunity to invite any witnesses of their
    choosing but chose not to at this time, and that I think would
    help explain some of the choices or the appearances of the
    witnesses with us today.
        The Chair now recognizes Mr. Sensenbrenner for his
    questions.
        Mr. Sensenbrenner. Yes. Thank you very much, and Mr.
    Chairman, I am glad that you pointed out that the Democrats did
    have a chance to invite a witness, and they failed to do so. So
    the complaint that we heard from the Ranking Member, I think,
    rings very hollow.
        The other thing that really irritates me is casting
    aspersions on research that is done because it is financed by
    somebody who may have a party, an interest. The thing is, is
    that I think that anybody who sells a product wants to make
    sure that their product is the absolute best that it can be,
    and maybe part of the motivation of that is to avoid liability
    problems, but I think part of the motivation is to keep
    America's edge in terms of developing new products, whether it
    happens to be fuel, whether it happens to be motor vehicle. And
    who is supposed to do that if those that manufacture or sell
    the products don't do it? I don't think the government can come
    up with something that is objective, and here what we have
    heard from all three of these witnesses is that the only thing
    the EPA test did was the impact of E15 on emission systems, not
    on the engine itself, not on the components parts of the
    engine.
        As a result, the thing that the opponents of this waiver
    have been harping on is that the study was really not complete.
    You know, it was kind of, you know, trying to diagnose a skin
    cancer by doing a CAT scan or an MRI.
        Now, you know, having said that, the draft bill that I
    have, which I hope my minority party colleagues will cosponsor,
    will have a truly objective analysis being done by the National
    Association of Sciences, so that nobody can say that the study
    was done by somebody with a financial interest or was biased
    because they wanted to advance a regulatory agenda.
        Now, I have a couple of questions of Mr. Leister.
        Why did the CRC move forward with its studies if E15 was
    already approved for use?
        Mr. Leister. Well, actually, we started our studies long
    before the waiver request was even made. We started our studies
    in 2008. That is why we actually tested E20 and E15. At the
    time we started, we were not aware that E15 was going to be the
    fuel of choice of EPA.
        Mr. Sensenbrenner. Was the EPA's response to your studies
    objective, and were their results fairly analyzed from an
    unbiased, scientific viewpoint, or was basically the EPA saying
    that everybody should ignore what you have done?
        Mr. Leister. You make it difficult because EPA actually
    pays for some of our projects, and we would hate to lose their
    funding.
        Mr. Sensenbrenner. Well, we won't talk about conflicts of
    interest here.
        Mr. Leister. You know, EPA did their analysis, and it
    appeared that they were under a tremendous amount of pressure
    to come up with some answers, and as a result, the more we
    informed them that there was more research to be done and more
    timely, the less interested they were in hearing about that. I
    might point out that the research that was done, you correctly
    pointed out that our members do this to find out what is
    happening, you know, what our problems are. Two of the members
    of CRC, the auto members, have used that research to actually
    now make E15-compatible vehicles. One makes--has made vehicles
    in 2012 and 2013 that are E15 compatible, and one has started
    in 2013 to make vehicles that are E15 compatible.
        I think that one says volumes for the fact they say the one
    is--any other vehicles they made prior to that they won't
    warranty with E15, and yet they are making ones that will, and
    secondly, that they have seen what the problems were based on
    the research, and they have fixed those problems.
        Mr. Sensenbrenner. I would like to squeeze in one more
    question of Senator Allard. There are safety concerns, as well
    as the other concerns, that have been expressed by the
    witnesses at the hearing. For example, the Coast Guard told the
    EPA that a waiver raised concerns relating to possible
    reduction in level of safety for recreational boaters. So we
    have got the recreational boaters.
        And at least in my part of the country and maybe yours,
    too, Senator Allard, we got snow blowers because everybody
    would be marooned if the snow blowers didn't work, and then
    during the summer we have lawnmowers. All of these small
    engines have the same problems with E15, and many of them are
    two-cycle engines where the increased ethanol would end up
    reducing the lubricating capacity of the oil that has to be
    mixed in with the engines.
        What do you have to say about that, and you know, can you
    broaden the complaint with the other small engines that I have
    mentioned?
        Mr. Allard. Well, I am not an engineer and probably can't
    answer that very directly, but I can say that there is concern
    among motorcyclists about the heat that is generated and the
    safety of the engine when they are riding their motorcycle.
        Mr. Sensenbrenner. Okay. I will rest my case on the Coast
    Guard then. Thank you.
        Chairman Stewart. Thank you, Mr. Sensenbrenner.
        Seeing not another individual to my right, we will now
    yield down to Mr. Weber.
        Mr. Weber. I really don't have a lot of questions, Chris. I
    appreciate that. I will note for the record that, unlike New
    Jersey, in Texas we can pump our own gas. I figured that in
    Texas we understand that consumers and businesses get it right
    a lot more often than the Congress. I applaud you all for
    testifying.
        Thank you.
        Chairman Stewart. All right. Well, thank you then.
        And Mr. Rohrabacher.
        Mr. Rohrabacher. Thank you very much, and I appreciate your
    leadership and coming right out of the gate this way.
        Chairman Stewart. Thank you, sir.
        Mr. Rohrabacher. Straight at an important issue. This is an
    important issue, and I will tell you something. Out in
    California, nobody can tell me that I am getting, that I not
    getting less gas mileage because of that ethanol, and quite
    frankly, people think we Congressmen are rich. Well, I am not
    rich, and it affects me, and what about those people who don't
    make as much as those of us in Congress? Increase the cost of
    filling up your tank, that just means you don't have as much
    money to pay rent or feed your kids or take your family out for
    a dinner.
        So ethanol was first in place, and you are the experts
    here, wasn't it first put in place, this mandate for ethanol,
    to get rid of the lead in gasoline? Is that right? No. Why did
    we have the mandate to begin with?
        Mr. Leister. The original ethanol mandate, I believe,
    started from a program EPA had to reduce carbon monoxide in
    certain cities that were in non-attainment of the carbon
    monoxide standard. I believe it was back in '91, '92,
    timeframe. There were a handful of cities that had carbon
    monoxide problems. There had been some splash blending of
    ethanol for economic purposes prior to that, but the actual
    regulation of ethanol was first put into place----
        Mr. Rohrabacher. For carbon monoxide gas, and did that
    lower the level of carbon monoxide?
        Mr. Leister. Yes. At the time, the engine technology at the
    time with carburated vehicles and that getting extra oxygen
    from the ethanol actually did help reduce carbon monoxide.
    Since that time, the new engines now automatically adjust. They
    sense the oxygen coming out of the exhaust and adjust the
    intake air, so you would no longer get that benefit from
    vehicles today, but it was a benefit back in the early----
        Mr. Rohrabacher. So in other words, we put this requirement
    in to lower the carbon monoxide, but because technology, engine
    technology has advanced, that that would be no longer necessary
    today? Is that what you are saying?
        Mr. Leister. That is true, but even more important than
    that, I guess, is that all the areas that were in carbon
    monoxide non-attainment, except for maybe one, I believe, have
    all come into attainment. They all came into attainment real
    fast, even as engine technology was----
        Mr. Rohrabacher. Is that true with motorcycles, too,
    Senator?
        Mr. Allard. Well, if you will recall, about the time I was
    in the House serving with you, the issue was oxygenated fuels.
        Mr. Rohrabacher. That is right.
        Mr. Allard. And we had the MTBE versus ethanol, and that
    was a big debate, and it was to reduce the air pollution.
        Mr. Rohrabacher. And was the air pollution level and would
    it be better today or worse today if we didn't have ethanol in
    the gas? From what I just heard, there it sounded like you were
    saying even without ethanol the gas, the air pollution level
    would not be any worse today.
        Mr. Leister. Well, you got to understand there are a lot of
    things we try to control in the air, not just carbon monoxide.
    The other major one is ozone. Okay?
        Mr. Rohrabacher. Right.
        Mr. Leister. And ozone comes about because of knocks
    NO2 emissions and volatile organic compounds or VOC
    emissions. In 1995, reformulated gasoline was legislated and
    regulated by EPA. That fuel is both lower in VOCs and lower in
    NO2, and so it is used in areas that have a problem
    with attaining the ozone standard, and it has helped, but in
    the interim all the other gasoline in the country because of
    various other EPA regulations has become a lot more, a lot
    cleaner.
        Mr. Rohrabacher. Is there anything else, is there another
    impact, for example, particulates?
        Mr. Leister. There is a particulate problem also.
        Mr. Rohrabacher. Doesn't the ethanol contribute to that
    rather than helping bring that down?
        Mr. Leister. It is difficult to say. I say there are some
    studies that show that particulates are reduced with oxygen,
    the extra oxygen that is present. Under newer vehicles, that
    effect isn't quite as large, and so there are some studies that
    show that particulates have actually gone up as a result of
    that, I believe.
        Mr. Rohrabacher. Right. Okay. Well, I think----
        Mr. Leister. But----
        Mr. Rohrabacher [continuing]. There are some studies like--
    --
        Mr. Leister [continuing]. It is really slight. Okay.
        Mr. Rohrabacher. But let me just note this, that if you are
    bringing down the miles per gallon that you are getting in your
    car, which ethanol does, I mean, I will testify to that, so
    that means you have to use more gas. You have to use more gas,
    that means to get to the same place, that means you have to
    have more, you are putting more stuff into the air.
        Mr. Leister. You are, but----
        Mr. Rohrabacher. But if you have to use more of it, that
    means you got the same amount of stuff going up.
        Mr. Leister. But the tier two standards that EPA put in
    place in 2007 basically required engines and fuels to be 90
    percent--have 90 percent less emissions than they had before.
    That overwhelms most of these other effects that you are
    talking about.
        Mr. Rohrabacher. Ninety percent based on miles per gallon,
    perhaps.
        Mr. Leister. No. It is actually----
        Mr. Rohrabacher. No?
        Mr. Leister. It is on a per-mile basis. So it builds in the
    miles per gallon factor.
        Mr. Rohrabacher. All right. Well, thank you very much. Just
    let me note that in California, we--at least those of us who
    are filling up our tanks with gas, and we drive a lot out
    there--we definitely believe that ethanol is costing us and
    costing American families a lot of money, and I am not so sure
    that it is worth exactly what we are paying for. Senator
    Allard, one last thing. Did you say this is going to hurt the
    engines for motorcycles?
        Mr. Allard. Congressman, that is a concern that we have
    because the manufacturer won't issue a warranty when you use
    E15 in the engine, so we think there is a reason for that, and
    we wouldn't recommend it to our consumers.
        Mr. Rohrabacher. Yes. We are afraid of that, too, and that
    also is a factor in determining what the pollution level is. If
    you are going to destroy an engine, that means, in the end,
    there is a lot more stuff going into the air when you add in
    all of that.
        Thank you very much, Mr. Chairman.
        Chairman Stewart. Yes, sir. Thank you, Mr. Rohrabacher. We
    now recognize the full Committee Chairman, Mr. Smith.
        Chairman Smith. Thank you, Mr. Chairman, and Mr. Chairman,
    let me say I regret missing the witnesses' testimony today but
    appreciate all of them being here, and Senator Allard, nice to
    see you again, and welcome back.
        What I am trying to do is, in my own mind, and I think this
    will be helpful to all of us and helpful to others as well, is
    sort of compiling a list of advantages and disadvantages of
    E15. And what I would like to do is give you my list on both
    sides and ask you all to comment to see if you agree or
    disagree or if you can add anything to either side of the
    ledger.
        On the disadvantages, we have unknown impact of E15 on
    various types of engines. We have had a study about emissions.
    We haven't had any real study on the impact of the engines
    themselves. Second, you get about 30 percent less gas mileage
    if you use E15. That might be a disadvantage. Environment, you
    can probably argue that either way, but the amount of energy,
    probably fossil fuel energy that goes into growing the corn
    necessary for ethanol is obviously not a positive impact on the
    environment. And then fourth, I would put, well, maybe those
    are my three. I was going to say, talk about more of the harm
    to engines, but I think my first point covers them.
        On the other side, as far as advantages go, price of
    gasoline is going to be less costly. I would put that as a
    positive, and then, again, on the environment you can probably
    argue either way. There is less CO2 going into the
    environment, but I have already mentioned the other side of
    that.
        What do you all think of that list of advantages and
    disadvantages and Mr. Darbelnet, I guess we will start with
    you.
        Mr. Darbelnet. Thank you. Well, with regard to impact on
    the engine, clearly that is one of our concerns, and I think
    you are correct to have that on your list of negatives.
        With regard to getting less miles per gallon, I would
    agree. It will yield less miles per gallon, but I think the
    differential is much smaller than 30 percent. Pure gas would be
    the benchmark. E10 would probably get you slightly less than
    four percent worse gas mileage.
        Chairman Smith. The figure I heard was actually 33 percent
    less. You think that is too much? Okay.
        Mr. Darbelnet. From everything I have seen, it is between
    four and six percent less, depending on whether you are using
    E10 or E15.
        Chairman Smith. Okay.
        Mr. Darbelnet. And as to the impact on corn, I am well over
    the tip of my skis on that topic, but with regard to the
    positives, less costly, yes, slightly, but one has to bear in
    mind that you are getting less miles per gallon, and with
    regard to the environmental impact, from our conversations with
    our engineers, they think that overall it is pretty close to
    being a wash.
        So really, the only outstanding issue for us at this point
    is the matter of impact on engines, and I think we should note
    in the pluses the reduced dependency on fossil fuel that
    results from using ethanol as an additive.
        Chairman Smith. Okay. Environment you would call a wash and
    less mileage, less cost, and unknown impact on engines on
    negative impact?
        Mr. Darbelnet. Negative impact.
        Chairman Smith. Negative impact. So overall negative, I
    guess.
        Senator Allard, and by the way, I am just curious, if the
    mileage is down six percent, is the cost going to be down six
    percent or not?
        Mr. Darbelnet. Well, that is part of the conversation. The
    cost is less. Is it six percent. Sometimes it is six percent,
    sometimes it is a little more, sometimes a little bit less.
        Chairman Smith. We are coming up with another wash there.
        Mr. Darbelnet. We are coming very close to a wash. I think
    the big issue is the impact on the engine.
        Chairman Smith. Great. Senator Allard.
        Mr. Allard. Congressman, I think the big concern that we
    would have is confusion at the gas tank, you know, with the
    rules and regulations that are at the gas tank that are being
    imposed upon the retailer. You know, I think that is a concern
    that we have, and then because of that confusion, you put the
    wrong kind of fuel in your engine, which the warranty will
    stand up with.
        Also, motorcyclists are concerned about the fact that if
    E15 is used in a rural gas station, for example, and you are
    out in a rural area, and you run out of gas, you don't have
    much choice, and so it takes away consumer choice in some
    instances.
        Chairman Smith. Okay. Thank you, and Mr. Leister.
        Mr. Leister. Again, I am talking for CRC, so I am going to
    just try to stick with scientific facts rather than opinions
    and political facts. Definitely we are concerned about the
    impacts on the vehicles, the engines, and the components with
    E15. We think millions of vehicles will be affected, so it is a
    bad choice for the public.
        As far as fuel economy, ethanol is 30 percent less energy
    than gasoline. When it is blended at a 10 percent rate, the E10
    mixture has a three percent less fuel economy. E15 would have 4
    1/2 percent using just straight multiplication there.
        And as far as energy and corn, there are a lot of studies.
    California found that, you know, corn wasn't necessarily so
    good for the environment, but then they changed their mind. EPA
    found that corn was. A lot of this has to do with the way you
    account for the energy that goes into the distiller's dried
    grain.
        However, if you are strictly looking at fossil energy going
    to something to give you energy to move a transportation
    vehicle, there is more energy of fossil fuel that goes into
    making ethanol than you get energy out of the ethanol. But when
    you add the distiller's dried grain in, the net result overall
    is positive. So if you have a program where you are trying to
    produce feed for animals, you might want to think about it.
        Chairman Smith. Okay. Did you comment on engines? Did you
    say it would be a negative?
        Mr. Leister. Yes. Yes.
        Chairman Smith. Okay. So there is general agreement among
    all the witnesses on a negative impact or a potential negative
    impact on engines then. Okay. Thank you.
        Thank you, Mr. Chairman.
        Chairman Stewart. Thank you, Chairman Smith.
        The Ranking Minority Member has requested a follow-up
    question. We now recognize Ms. Bonamici.
        Ms. Bonamici. Thank you very much, Mr. Chairman. I am
    holding up the whole side of the dais today.
        I wanted to talk a little bit about the misfueling that I
    know several of you have mentioned. Misfueling would be a real
    concern, but it is not an unprecedented issue. Similar problems
    were anticipated when unleaded fuel was introduced, and more
    recently there were concerns about the ultralow sulfur diesel
    that would result in widespread misfueling as well as
    infrastructure challenges. For a couple of years, there were
    two types of diesel in in the fuel supply: low sulfur diesel
    and the ultralow sulfur.
        Did the AMA or the AAA notice any significant refueling,
    misfueling issues, and was the fuel industry generally able to
    meet the challenge, and maybe you could talk a little bit about
    some of the consumer information that went into informing
    gasoline consumers about those issues. Senator Allard and Mr.
    Darbelnet, perhaps. I don't know if, Mr. Leister, you want to
    opine on that as well. Thank you.
        Mr. Allard. Well, those--if I might respond, on the
    misfueling issues, I guess you would say the four gallon, when
    they required the four-gallon minimum, that was--that is a
    problem for us because many times the tanks only hold three to
    three and a half gallons. So the question came up then, what do
    you do with the remaining fuels, and are you going to be
    charged for the four full gallons if you don't use it? So that
    is where confusion at the pump existed when we had that
    mandate. Now----
        Ms. Bonamici. But that only for the----
        Mr. Allard [continuing]. The EPA has tried to correct that,
    and they have now, as we understand it, you know, you do have a
    choice on blender pumps as well as you have a dedicated pump
    just for 10 to 0 on your ethanol levels. And then if you--or
    you can just have single hoses, and you don't have an issue,
    and you don't have the minimum.
        And so it gets--it is very confusing, you know, by the time
    you consider all the rules and regulations, and it is confusing
    to our consumers, and it is hard to make wise choices as a
    consumer when it gets confusing.
        Ms. Bonamici. Thank you, Senator, and I am interested, too,
    in hearing about some of the efforts that have been made in the
    past about different fueling options and informing consumers.
    How has the industry gone about informing consumers when there
    were other concerns about misfueling?
        Mr. Darbelnet. Well, that is an excellent question, and it
    reminds me of the transition that we encountered when we went
    to unleaded fuel, which you referred to. As you may recall, at
    that time they changed the size of the hole through which the
    gas is put into the vehicle, and we changed the size of the
    filler spout on the pumps, such that you could not fit the
    nozzle from an unleaded pump into the tank of a vehicle that
    wasn't designed to receive it. So unless you were going to use
    a funnel to fill your car, there was virtually no risk of
    putting unleaded fuel in a vehicle that should have leaded
    fuel.
        There is no discussion currently of anything of that nature
    being done to prevent misfueling as it relates to E15, and
    frankly, I think there is a limit to how many different sizes
    we can come up with to address the problem.
        So I think the misfueling risk is more significant in this
    case than it has been in the past, simply because we don't have
    some of the options available that we did previously.
        Ms. Bonamici. And yet, Mr. Leister, and if you could just
    clarify, I recall that you testified that there are
    manufacturers now who are manufacturing cars that are made for
    E15. Is that correct?
        Mr. Leister. Yes. I will answer that first, and then I
    would like to get back to the previous question, but, yes,
    there are two manufacturers that I am aware of that have
    announced, one that it is 2012, and 2013, cars are E15
    compatible, and I believe their owner's manuals now state that,
    and one that has done the same thing for their 2013, vehicles.
        Ms. Bonamici. Okay. So there have been adaptations, and
    then----
        Mr. Leister. There have been adaptations.
        Ms. Bonamici [continuing]. Your response to the prior----
        Mr. Leister. I guess I would like to point out that for
    unleaded gasoline there wasn't--there was a nozzle change, but
    also from our point of view there was, we believe, significant
    cheating as people could buy, for five or 10 cents, a little
    plastic adapter called an emergency fuel system, where you
    would plug it on the end of the nozzle, and it would make it
    smaller to fit into the old hole.
        So if you give people sufficient incentive, they will try
    to go for the lower fuel, whether it is good for their car or
    not.
        Ms. Bonamici. Interesting commentary. Well, thank you very
    much. I yield back my time. Thank you.
        Chairman Stewart. Okay. Thank you, Ms. Bonamici.
        Knowing that we are needed on the House Floor for a vote in
    just a few moments, the Chair would like to recognize Mr.
    Neugebauer.
        Mr. Neugebauer. Yes. Well, thank you, Mr. Chairman, and
    thank you for holding this hearing. This is a very important
    issue.
        This will be a quick question because we need to go vote,
    but, you know, some of the proponents of E15 and ethanol bring
    up the point that in other countries they burn 50, 60 percent,
    and some vehicles are burning almost complete 100 percent
    ethanol. So what is the distinction here of the U.S. moving to
    the ethanol blending versus what people will point to other
    countries using? What is the difference?
        Mr. Leister. Most of the time people reference Brazil when
    they are talking about that, and the fact is, I think, most of
    my auto manufacturer colleagues would tell you that the
    vehicles that they sell in Brazil toady are essentially FFEs.
    So they are designed to take higher levels. They are not U.S.
    vehicles that shipped down there.
        I would like to point out the early days of the program in
    Brazil, the ethanol ate the cars apart, and so they had to
    replace them with FFEs.
        Mr. Neugebauer. Either one of you want to comment on that?
        Mr. Darbelnet. I would simply concur with what was offered
    in terms of a commentary.
        Mr. Neugebauer. So I think the conclusion I am drawing from
    listening to the testimony today is that there is a movement to
    provide in the automobile industry an adaptation to that, but
    what you are saying, it is not mature enough at this particular
    point in time, and that if we force that process, then we could
    be actually damaging the consumers that own vehicles.
        Mr. Darbelnet. That is correct, sir. If one thinks about
    how many new vehicles enter the fleet each year and the average
    age of the fleet, it is going to take probably a decade to get
    to a point where a substantial majority of vehicles would be
    suitable for E15, unless there is some other discovery or
    retrofit that becomes available or some further ingredient that
    can negate the effect, but at the present time, there are
    roughly just five percent of the vehicles on the road that
    could safely burn E15.
        Mr. Neugebauer. So nobody has come up with an additive or
    something like that that helps.
        So, Senator Allard, good to see you again. So what should
    be the appropriate policy on this issue? You are an old
    policymaker. What would you recommend to this Committee?
        Mr. Allard. Well, I would withhold putting E15 on the
    market until the research has been conducted that would assure
    that motorcyclists, in this particular instance since I
    represent the AMA, can use it without damage to the engine. To
    me, that is the proper policies to have the right research, and
    it hasn't been done at this point, at least for the type of
    vehicle that I am representing at this table.
        Mr. Neugebauer. And we are really not, I mean, you bring up
    motorcycles, and we have been talking about automobiles, but
    really we are actually talking about a lot of other products
    that----
        Mr. Allard. Yes.
        Mr. Neugebauer [continuing]. Use fuels that we need.
        Mr. Allard. Well, I think you can generalize and say small
    engines in general.
        Mr. Neugebauer. Right.
        Mr. Allard. Uh-huh.
        Mr. Neugebauer. I yield back, Mr. Chairman.
        Chairman Stewart. Thank you, Mr. Neugebauer.
        With that, we come to the conclusion of this hearing. I
    would like to thank the witnesses for your valuable testimony
    as well as the Members for their questions.
        The Members of the Committee may have additional questions.
    If that is the case, then we would ask you to respond to those
    in writing. The record will remain open for two weeks for
    additional comments and written questions from the Members.
        The witnesses are excused with, again, with our thanks, and
    this hearing is now adjourned.
        [Whereupon, at 3:14 p.m., the Subcommittee was adjourned.]

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