What’s Happening with E20? Iowa Renewable Fuels Summit January 31, 2008 Des Moines, Iowa

1. Minnesota Department of Agriculture Ralph Groschen What’s Happening with E20? • Iowa Renewable Fuels Summit • January 31, 2008 • Des Moines, Iowa • Ralph Groschen, Senior Marketing Specialist • MN Department of Agriculture

3. Minnesota Ethanol: Economic and Employment Impact *Projected Source: AMS, MDA

4. Minnesota Ethanol Production and Consumption (Million Gallons) *Estimated consumption based on Gov. Pawlenty’s proposed 20% blend ethanol by 2012. Source: AMS, MDA

5. Renewable Fuels in Minnesota • Governor Pawlenty takes Minnesota to the next level • Goal is to make Minnesota the “Saudi Arabia of renewable energy” • May 2005: Signs legislation to move to 20% ethanol content in state gasoline by 2013 • Boosts number of E-85 vehicles in state fleet • September 2005: Minnesota becomes first state to mandate use of 2 percent biodiesel

6. Minnesota’s E20 Program • MN now requires gasoline contain 10% ethanol • Under the new language 20% ethanol will be required on 8/30/2013 unlessby12/30/2010: • 1. 20% of MN gasoline is ethanol (E85?) -or- • 2. EPA does not approve a 211 (f)(4) waiver application to certify E20 as “gasoline”

7. Minnesota’s E20 Program • Two ways to replace 20% of MN’s gasoline: • 1. Replace another 10% of gas with E85 • -or- • 2. Implement E20 mandate by getting EPA waiver for E20

8. E85 Route to Solution • Estimated schedule of sales necessary to reach gasoline replacement goal: • 2004- 2.6 million gal. E85 sales • 2005- 6.2 million gal. E85 sales • 2006- 16 million gal. E85 sales* • 2007- 34 million gal. E85 sales* • 2008- 82 million gal. E85 sales* • 2009- 194 million gal. E85 sales* • 2010- 460 million gal. E85 sales* * Required to meet goal of displacing additional 10% gasoline

9. E85 Route to Solution 2006 300+ 18,200,000 Actual Source: MN Dept. Commerce July, ‘06

10. Source: Minnesota Dept of Commerce

11. EPA Waiver Route to Solution • E20 will be considered a “new additive” and will have to be certified by EPA • Approval, will apply on a national level • EPA will seek guidance from vehicle manufacturers, (is E20 OK?)

12. EPA Waiver Route to Solution • State of Minnesota is working w/ RFA in an automotive focused research program to study fuel system materials compatibility, vehicle driveability performance and vehicle emissions.

13. EPA Waiver Route to Solution • The Plan • Do preliminary testing to identify any “show stoppers” for automotive applications • Use preliminary data to determine the next step in the process and how to fund any further work • Additional tests and fund raising efforts will be required if full EPA application is pursued

14. EPA Waiver Route to Solution • In order to certify E20 under 211(f)(4) EPA must receive documentation in five areas: • 1. Materials compatibility of fuel system components with E20. (Preliminary testing at MN. State Mankato, Dr. Bruce Jones) • 2. Drivability with E20. (Preliminary testing at U of M Engineering, Dr. David Kittleson) • 3. Exhaust and evaporative emissions with E20. (RFA & ATL Lab in Mesa, AZ) • 4. Health effects testing on E20 fuel. (EPA report pending on E10) • 5. Durability (high mileage) Testing.

15. Materials Compatibility • Minnesota State University, Mankato • Four part compatibility test program • 1. Metal materials • 2. Plastic materials • 3. Elastomeric “rubber” materials • 4. Fuel system components (fuel pumps)

16. METAL MATERIAL COMPATABILITY MSU, Mankato • 3 Fuel Blends • Gasoline (Fuel “C”) • E10 • E20 • Physical Changes • Corrosion • Mass Loss • Swelling • Strength • “Soaked” at 45o C for 2000 hours • Fuel Changed Weekly • Measurements Taken at 1-3-6 & 12 Week Increments

17. FUELS and TEST SAMPLES • Gasoline "base" fuel • 50% toluene and 50% iso-octane • E10 fuel • 45% toluene, 45% iso-octane, 10% aggressive ethanol • E20 fuel • 40% toluene, 40% iso-octane, 20% aggressive ethanol • Ethanol • synthetic ethanol 816.00gm, de-ionized water 8.103gm, sodium chloride .004gm, sulfuric acid .021gm, glacial acetic acid .061gm

18. 10 Samples Strung Together Separated by Glass Beads

19. The Test Fixture

20. Drivability Study • Test conducted by U of M Mechanical Engineering Dept. • University Motor Pool providing vehicle & driver access, service and controlled fuel dispensers • 40 pairs (80) vehicles are paired according to vehicle make, model, engine configuration and duty assignment • Each member of a vehicle pair is restricted to use of either E0 or E20 through the use of assigned “credit” cards for use at fleet headquarters. • Driver log sheets compiled

21. Drivability Study • Vehicle and engine types Include: • Passenger and light duty (up to 1 ton) trucks. • Ford, Chrysler, GM and Toyota • V10, V8, V6, L4 and hybrid power. • Includes rental pool vehicles and those assigned to U of M police, trade and professional employees.

22. Drivability Study Added feature to drivability study • 4 seasonal evaluations by trained raters on a 1 mile test track provided by the U of M. • 20 of the 80 test vehicles were so evaluated • Professional ratings occurred: • October 21, ‘06 between +34 to 36º F • January 20, ’07 between -6 º to+ 6 º F. • April 14, ’07 similar to October • July ’ 28 and 29 ’07 between 87 to 100 º F.

23. Rosemount, MN January 20, 2007 / 0º F

25. July 29 – 30, 2007 UMORE PARK Rosemont, MN 90 - 100 º F

27. Fuel Quality Testing • Fuel deliveries made to the University Fleet center location for the Drivability Program are sampled by the U of M. • The Minnesota Department of Commerce, Division of Weights and Measures tests for: • -Volatility • -TVL20 • -T10, T50 and T90 • -Among other tests.

28. Emissions Testing • RFA has contracted for vehicle emissions testing at Nationally recognized “Automotive Testing Laboratories”. • Three Vehicles • 1. 1980's carbureted, closed loop vehicle • 2. Port fuel injected vehicle meeting Tier One Emission Standards • 3. Port fuel injected vehicle meeting Tier Two Emission Standards.

29. Emissions Testing • Test fuels will be “Emissions Certification Fuel” as (E0) and the same splash blended with fuel grade ethanol to make (E20) • The extensive and expensive emissions control systemdurability tests (multi-vehicle, 100,000 miles) will not be included in this stage of the program.

30. Health Effects Testing • Potentially the most expensive part of testing program • Currently awaiting US EPA report of the already completed E 10 Health Study • Certain results may be extrapolated to E 20 • Results were expected in December ’05 but peer review is on-going, results later in 2007?

31. In conclusion: • Test data will be used in any final application with the EPA. • Plans and funding for data required with full EPA application will be determined by the results of these tests. • The time and financial commitment required to prepare data suitable for a full application will be considerable.

32. In conclusion: • So far, no obvious show stoppers have been found in the test data from the three tests.

33. Thanks to: • MN Legislature, RFA, MN Corn Growers and Great Lakes Governors Council for funding preliminary studies so far. • Thanks to the U of M -Twin Cities, MSU Mankato, Department of Commerce, Pollution Control Agency, MNDOT and others for their assistance.