Pabicla A. Woertz

Chairman, Chief Executive Officer and President

Archer Daniels Midland Company 4666 Faries Parkway

Decatur, IL 62526

T 217.424.5405 F 217.424.4266

June 7,2010

The Honorable Lisa Jackson Administrator

U.S. Environmental Protection Agency Ariel Rios Building

1200 Pennsylvania Avenue, NW. Mail Code: 1101A

Washington, DC 20460

Re: Request for approval of ethanol-gasoline blends of up to and including 12 percent ethanol for all vehicle model years

Dear Administrator Jackson:

ADM formally requests the Environmental Protection Agency to approve ethanol-gasoline blends containing up to and including 12 percent ethanol for all cars as part of its response to the Growth Energy petition to waive the prohibition of the sale of fuels containing up to 15 percent ethanol by volume (E15). ADM also formally requests EPA to alter its "substantially similar" Clean Air Act

§ 211 (f)(1) interpretive rule to allow higher oxygen content, and thus, ethanol-gasoline blends containing up to and including 12 percent ethanol.

The U.S. ethanol market has reached the point of saturation. Right now, the industry is producing more than the market can absorb, resulting in more exports (to places like Korea and the Middle East), while our inventories are growing and prices are falling. Quick action by the EPA approving enhanced blends of ethanol for all vehicle model years could right this imbalance.

ADM continues to strongly support the Growth Energy E15 waiver request. However, if the EPA allows enhanced blends in only model year 2001 and newer cars, the requirements of the Renewable Fuels Standard (RFS) and the President's goal of tripling biofuels production over the next twelve years will not be met. Our largest ethanol customers continue to say that an enhanced blend decision that does not apply to all cars will not be adopted quickly in the marketplace. ADM strongly supports full implementation of the Renewable Fuel Standard as sound public policy. Like the EPA, we are searching for the right course to achieve these important goals. If the EPA cannot, in the near term, approve blends up to and including E15 for all vehicle model years, it should consider and approve under the Growth Energy petition an enhanced blend of up to and including E12 as an alternative.

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The Honorable Lisa Jackson Page 2 of 5

Specifically, ADM believes EPA can successfully balance these goals by focusing its analysis on approval of an ethanol-gasoline blend containing up to 12 percent ethanol by volume, known as "E12," under Clean Air Act Section 211 (f). Allowing E12 for all vehicle model years would advance the Administration's goals of increasing its ability to benefit from renewable fuels while enabling a transition to higher ethanol blends at the appropriate time in the future. As described below, EPA has the clear legal authority to advance these benefits by authorizing E12 for distribution now. In addition, the analysis below also applies to fuels containing up to and including 11 percent ethanol by volume (E11), and ADM respectfully requests that EPA approve E11 if it is not prepared to approve E12 at this time for all model year vehicles.

As EPA continues to consider the Growth Energy E 15 waiver request under Clean Air Act Section 211 (f)(4), it should fully consider the option of simultaneously granting a waiver for lesser included ethanol-gasoline blends, i.e. E11 and E12 applicable to all model year vehicles, pending further consideration of E15's effect on older model vehicles. EPA also has the authority to approve E12 by revising its "substantially similar" interpretive rule under Clean Air Act Section 211 (f)( 1), in light of the fact that E12 is "substantially similar" to ethanol-gasoline blends currently used for certification of vehicles. Approval of E11 and E12 blends through this route should render a result applicable to all model years.

Statutory Background

Section 211(f)(1) of the federal Clean Air Act (CAA), 42 U.S.C. § 7545(f)(1), prohibits the sale of any fuel or additive "which is not substantially similar to any fuel or fuel additive utilized in the certification or motor vehicles or engines. 42 U.S.C. § 7545(f)(1). Section 211 (f)(4), 42 U.S.C. § 7545(f)(4), allows EPA to waive that prohibition, if the applicant can show that a fuel or additive "will not cause or contribute to a failure of any emission control device or system" to meet applicable emission standards over the vehicle's useful life.

Thus, a fuel can be approved for use under § 211 (f) if it either: (1) is "substantially similar" to any fuel used in the certification of motor vehicles or motor vehicle engines; or (2) receives a waiver under

§ 211 (f)(4). Under the terms of the statute, fuels up to and including E 12 can be authorized at this time for all model year vehicles for both these reasons while further study of E15 blends on old model vehicles takes place.

Section 211 (f)(4) Waiver for Fuels up to and including E12

Federal law currently allows a blend of up to 10 percent ethanol, the result of an earlier waiver application under CAA Section 211 (f)(4). On March 6, 2009, Growth Energy submitted an application for a waiver under CAA § 211 (f)( 4) seeking authorization to market" up to a 15 percent base blend of ethanoL" (EmphasiS added.) Thus, on its face Growth Energy's application requested EPA consideration of lower ethanol blends, including authorization for fuels containing up to a 12 percent blend of ethanol. Indeed, when EPA requested comment on this waiver application, it specifically

June 7, 2010

The Honorable Lisa Jackson Page 3 of 5

stated that granting a waiver for a blend between E10 and E15 was a possible outcome of its review, requesting comment on possible alternate levels. 74 Fed. Reg. 18228, 18229-30.

Under the Clean Air Act, a decision on whether to approve a waiver request hinges on whether a fuel causes failure of an emission control device or system. Ethyl Corp. v. EPA, 51 F.3d 1053, 1058 (D.C. Cir. 1995) (interpreting the § 211 (f)(4) waiver provision}. Growth Energy's E15 waiver request, supported by the studies submitted by Growth Energy and numerous commenters, demonstrates that blends up to and including E15 "will not cause or contribute to a failure of any emission control device or system." Beyond what is strictly required by the Clean Air Act, commenters also submitted ample evidence that increasing the ethanol content of gasoline would not have a negative impact on materials compatibility, or motor vehicles' drivability, or emissions performance.

Based upon the evidence submitted on the record, we believe that EPA has a basis to grant the Growth Energy E15 waiver request in its entirety and without restriction based on vehicle model year. Moreover, the evidence submitted in response to the E15 waiver request makes plain that EPA has the authority and ample basis, to at the very least, provide a § 211 (f)(4) waiver for an intermediate blend up to and including E12. To the extent there is any lingering concern that, despite the best available evidence, E15 might have some yet undiscovered impact on vehicle emissions or drivability or that additional time is needed for infrastructure to accommodate the transition to E15 for all model year cars, granting a waiver for up to E 12 without model year restriction would alleviate that concern and ensure a smooth transition to higher ethanol blends. Granting such a waiver will advance the nation's renewable energy objectives in the interim while EPA gives further consideration and study to a grant of an E15 waiver which embraces all vehicle model years.

Request to Revise EPA "Substantially Similar" Interpretive Rule

In addition to authorizing blends up to and including E12 through a waiver process, EPA, in the alternative, has authority to identify fuels up to and including E12 as "substantially similar" to existing certification fuels. In past decisions, EPA has focused the analysis on whether a fuel is "substantially similar" to the fuels used for engine certification, not to fuels that have previously received a waiver. See 74 Fed. Reg. at 25019 ("One point to be clear on is that the substantially similar provision relates to fuels used in certification. It is not an issue of whether mid-level blends are substantially similar to a fuel that has received a waiver of this prohibition."). This interpretation draws upon the language of Section 211 (f)(1), which addresses whether a fuel is "substantially similar to any fuel or fuel additive utilized in the certification" of motor vehicle engines. 42 U.S.C. § 7545(f)(1}.

Assuming that EPA is correct that a fuel must be "substantially similar" to a fuel used for vehicle or engine certification to qualify for distribution under § 211 (f)(1), EPA would be correct to revise its "substantially similar" interpretive rule to authorize fuels up to and including E12. This is because E10 is currently a fuel used for certification or should be treated as a certification fuel, and EPA has the authority to conclude that E12, in turn, is substantially similar to E10.

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The Honorable Lisa Jackson Page 4 of 5

First, E10 is properly characterized as a fuel used in certification.

As EPA has explained, "The certification process employs two fuels: a standardized testing fuel which must have properties that meet specifications promulgated under the Act and a mileage-accumulation fuel which must be representative of commercially available fuels." 46 Fed. Reg. 38582, 38583. We understand that E10 is currently used for evaporative emissions testing and as a mileage-accumulation fuel. See 40 C.F.R. § 1065.701 (f) (authorizing use of "appropriate commercially available fuel" for mileage accumulation). Thus, it is entirely appropriate to treat E10 as a certification fuel because there can be no question that E 1 0 is "representative of commercially available fuels." Over 500 billion gallons of E10 have been sold in the United States since EPA's initial E10 waiver. Ethanol's competitive pricing and the Federal Renewable Fuel Standard have ensured that E10 is now the dominant fuel in the light-duty transportation market. In short, E10 is properly characterized as a fuel used for vehicle certification.

Second, fuels up to and including E 12 should be deemed substantially similar to E 10.

Fuels up to and including E 12, of course, are chemically very similar to E 10. The studies cited by commenters on the E15 waiver application have amply demonstrated that fuels like E12, with higher oxygen content do not have any adverse effects on materials compatibility, motor vehicle drivability, or motor vehicle emissions. Moreover, as USDA Secretary Vilsack has stated, citing Department of Energy research, E12 would not have any adverse effects on motor vehicles or motor vehicle emissions.

To the extent that there is any lingering concern regarding the impacts of E15 or a need to provide lead time for E 15 use throughout the entire vehicle fleet, fuels up to and including E 12 provide a ready and present path forward. E10 is dominant in the retail fuel market, and so EPA has ample assurance of its benefits. EPA clearly may interpolate its data on E15 with its established data on E10, to demonstrate that fuels up to and including E 12 would not have any negative impacts of vehicle emissions or drivability. Thus, fuels up to and including E12 should be deemed allowable under the Clean Air Act, because they are substantially similar to E10, a fuel used in the certification of motor vehicles.

Third, EPA should revise its substantially similar interpretive rules to encompass fuels up to E12.

EPA has traditionally defined what fuels are "substantially similar" using interpretive rules. The current pertinent "substantially similar" interpretive rule imposes a practical ceiling on the concentration of ethanol in gasoline, because it limits the oxygen content of gasoline to 2.7% by weight. 73 Fed. Reg. at 22281. The maximum allowable ethanol content under the interpretive rule is about 7.5% ethanol, or E7.5. E10, which contains approximately 3.54% oxygen by weight, is allowed by EPA's past E10 waiver, not by the "substantially similar" interpretive rule.

Reflective of this, EPA should revise its current "substantially similar" rule because E10 is a fuel used for certification. Thus, under the plain terms of the Clean Air Act, E10 necessarily is "substantially similar to any fuel or fuel additive utilized in the certification" of motor vehicle engines, and the substantially similar rule should be revised to reflect this fact. 42 U.S.C. § 7545(f)(1). Thus, at a minimum, EPA should revise its "substantially similar" rule to allow for at least 3.54% oxygen by weight.

June 7,2010

The Honorable Lisa Jackson Page 5 of 5

ADM submits that the substantially similar interpretive rule should be further revised to allow up to 4.25% oxygen by volume. This would allow blends of up to 12% ethanol. EPA has already permitted distribution of fuels with an oxygen content as high as 4.0% under the E10 waiver. See 74 Fed. Reg. 24904, 25018 (May 26, 2009). Thus, the 2.7% oxygen limit contained in the current substantially similar rule has not been a consistent or crucial part of EPA fuels policy, and it should be revised to a threshold of at least 4.0% to appropriately acknowledge EPA's past practice of allowing such concentrations. Moreover, the information presented in support of Growth Energy's E15 waiver request demonstrates that the threshold should be raised to 4.25%, allowing fuels up to E12 because E12 is substantially similar to E10, a fuel used in the certification of motor vehicles. As the Congressional Research Service report on "Intermediate-Level Blends of Ethanol in Gasoline" concluded in January of this year, "EPA does have the authority to determine that E12 ... is 'substantially similar' to gasoline."


We commend the Agency for its thorough consideration of the full implications of Growth Energy's E 15 waiver request. As those implications suggest, the granting of a partial waiver making blends up to E15 allowable only in vehicles which are 2001 model year or newer will fall short of the regulatory and public policy support required by the marketplace. If the EPA believes that approval of E15 must be restricted to newer model vehicles, we believe an interim step of approving fuels up to and including E12 for all vehicle model years provides a sound path forward to advance the renewable energy goals of the nation. Please do not hesitate to contact me if I can be of any assistance in considering this request

cc: Gina McCarthy Margo Oge

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