API launches ad campaign against higher ethanol mandates

Source: Nick Sobczyk, E&E reporter • Posted: Wednesday, August 10, 2016

The American Petroleum Institute yesterday launched a campaign against the renewable fuel standard in an attempt to push back against higher ethanol mandates for U.S. gasoline.

The campaign will include television, radio and online advertisements in markets across the United States. It will aim to show how higher ethanol mandates for fuels could raise costs for consumers and potentially void vehicle warranties by damaging engines not designed for highly blended fuels.

Most cars on the road today are not designed for E15, an ethanol mix approved by U.S. EPA that includes 15 percent of the biofuel, Frank Macchiarola, API downstream group director, said today in a conference call with reporters.

“The broken RFS mandate aims to force consumers to use higher ethanol blends that they don’t want and they don’t need,” he said.

Macchiarola pointed to a poll released by API earlier this year showing that 77 percent of registered voters were concerned about increased levels of ethanol in gasoline. Seventy-three percent of respondents in the same poll agreed that federal regulations could contribute to higher gas prices, Macchiarola said.

The survey contrasts with another poll released around the same time by the Renewable Fuels Association, which suggested that more than half of Americans support the RFS.

Macchiarola said API will continue to push EPA to cap ethanol levels at 9.7 percent of the fuel supply and ensure that ethanol-free gasoline remains available to consumers such as boaters and classic car owners who may prefer traditional fuel.

Most gasoline sold in the United States currently contains about 10 percent ethanol, but demand has fallen below what was expected when Congress passed the RFS in 2007. As EPA continues to increase the amount of ethanol required in U.S. fuels each year, ethanol volumes have in recent years exceeded the 10 percent limit.

Reform efforts

The API campaign comes as the limit increasingly comes under scrutiny and efforts to reform the RFS have drawn a bipartisan group of supporters in the House.

“The factors, the conditions have changed and really have moved the need to advance a change in the RFS,” Macchiarola said.

API supports legislation (H.R. 5180) introduced by Reps. Bill Flores (R-Texas) and Peter Welch (D-Vt.) that would reform the RFS and prevent EPA from mandating ethanol blends greater than 9.7 percent.

The bill has over 100 co-sponsors, including prominent members from both parties, but the existing RFS enjoys bipartisan backing in the Senate, as well as the support of both parties’ presidential nominees.

Democratic nominee Hillary Clinton publicly supports the RFS, but when she met last week with California regulators about possible market-based reform to the ethanol mandate, she drew a sharp rebuke from Iowa Republican Sen. Chuck Grassley (Greenwire, Aug. 4).

Grassley was part of a bipartisan group of senators who last month pressed EPA to increase biofuel volumes in its final 2017 rule. The group of 40 senators was led by Grassley and Sens. Roy Blunt (R-Mo.), Patty Murray (D-Wash.) and Heidi Heitkamp (D-N.D.) (E&ENews PM, July 21).

And on the campaign trail, both presidential candidates have trumpeted their support. Clinton wrote a 2015 op-ed in an Iowa newspaper in support of the measure, while Republican nominee Donald Trump in January called for EPA to meet ethanol levels set by Congress.

Meanwhile, a group of five California Democratic House members yesterday also petitioned EPA in a letter to stop waiving congressionally set targets.

EPA drew controversy from API and the biofuel industry in May over its proposal to increase the amount of ethanol blended into American gasoline in 2017 to 14.8 billion gallons, just 0.2 billion gallons shy of the volume set by Congress in 2007. The biofuel industry said the agency was catering to the will of the oil lobby, while API criticized EPA for setting the mandate too high and ignoring decreasing demand in the market (E&ENews PM, May 18).

The group wrote yesterday that EPA “is essentially allowing the oil industry to cap the RFS and limit future growth in the biofuels sector.”

Rep. Eric Swalwell (D-Calif.), the leader of the five-member group, said in a statement that biofuels have spurred billions of dollars of private-sector investment and supported nearly 60,000 jobs in California.

“California and the nation have made great strides in protecting the environment, improving air quality, meeting fuel demand and creating jobs through use of biofuels under renewable fuel standards,” Swalwell said. “The EPA must follow Congress’ intent and keep up the pressure on the oil industry to provide the infrastructure needed to deliver these cleaner fuels.”

But Macchiarola said that while he expected resistance to lower mandates and RFS reform in Congress, the API campaign will be about building momentum to continue the oil industry’s crusade against the standard into the next presidential administration.

“We understand that there’s a very limited amount of legislative days,” he said. “But our sense is we’re going to push as hard as we can going toward the end of this Congress, and we want to pick up momentum so that if it doesn’t get done in this legislative calendar, we pick up immediately in the next Congress and the new administration.”