James Monroe Capital Corp (JMON)

[jgbuz]

The Plain Dealer
Corrosion worries stall ethanol mix
UL action on pumps won't affect common 10% blend
Wednesday, October 25, 2006
John Funk
Plain Dealer Reporter
The homegrown fuel that is supposed to wean America from its petroleum addiction has slipped into a regulatory morass that threatens to stall its expansion.

E85, the blend of 85 percent corn-based ethanol and 15 percent gasoline, might be corroding some metal and plastic parts in the dispensers that motorists use to pump the fuel into their gas tanks. Or not.

The nonprofit Underwriters Laboratories isn't sure anymore. It has temporarily withdrawn authorization for the UL-approved label on parts for E85 dispensers. (Pumps dispensing lower concentrations - such as the 10 percent ethanol blends common in Ohio - are still approved.)

The reversal, coming after years of E85 sales without any known safety problems, means the pumps do not meet state and local fire codes, which require certification from UL or another independent tester.

UL is holding two days of hearings next week at its headquarters outside Chicago, inviting all parts of the industry and the Department of Energy to help it develop standards for E85 equipment.

More than 1,000 stations across the country offer E85, including 14 in Ohio, according to the National Ethanol Vehicle Coalition. Columbus Fire Marshal Karry Ellis ordered two Ohio stations - including one owned by the Ohio Department of Transportation - to stop dispensing E85 until the issue is resolved.

"I can't set aside the state fire code," Ellis said. "I have talked to the state fire marshal, and he has agreed."

State Fire Marshal Stephen Woltz's office is considering a temporary variance or compromise, though, while UL develops standards and then tests equipment, said a spokesman for Woltz. Woltz has been in contact with other states, including Iowa, where compromise rules were drawn up a year ago.

The office is also working with Gov. Bob Taft's office. Taft has made expansion of E85 stations a major goal.

Ethanol trade groups say the situation has delayed expansion. "There are many retailers holding back from putting in E85 right now," said Michelle Kautz of the National Ethanol Vehicle Coalition.
In Ohio, a major retailer has postponed opening more than 20 new E85 stations until the issue is resolved, said Sam Spofforth, executive director of Clean Fuels Ohio. He declined to name the retailer.

The Ohio Petroleum Marketers and Convenience Store Association initially advised its members to stop dispensing E85, but in a Monday update it said the issue could be resolved soon.

UL has never actually approved an E85-only dispenser. Instead, as stations converted gas pumps to E85, UL extended approval to parts made of new materials - for example, stainless steel substituted for aluminum and brass.

Several months ago, when a manufacturer submitted an entirely new E85 dispenser for approval, UL began rethinking.

"We realized ethanol is much more corrosive than gasoline, especially when it comes to soft metals and some plastics," said John Drengenberg, UL's manager of consumer affairs. "So we did the responsible thing. We suspended authorization."

It is not unusual for UL to change standards, said Drengenberg.

"We just changed standards for toasters. What we did with E85 is very routine. We'll look at technology, at statistics from accidents."

He acknowledged that, in this case, UL has no reports of accidents caused by E85 eating through dispenser components. Instead, he said, the approval of the components did not meet UL's own rigorous procedures.

But Ron Lamberty, director of market development at the American Coalition for Ethanol, said it's hard to understand UL's action when there's an unblemished safety record.

"You've got pumps out there that have been operating for 10 years or more without any problems," he said. "We are talking about a time frame for UL's new standards of months, if not years. In the meantime, UL should just say, 'Keep an eye on 'em.' "

To reach this Plain Dealer reporter:

[e-mail], 216-999-4138