Des Moines area’s grades mixed on renewable fuel

Source: Christopher Doering, Des Moines Register • Posted: Thursday, July 10, 2014

WASHINGTON – Gas stations with operations in the Des Moines area received mixed grades fromthe ethanol industry for their willingness to carry fuel containing higher blends of the product.

The report from the Renewable Fuels Association released Tuesday said Kum & Go and Kwik Trip, which have operations in the Des Moines area, were among the eight companies that received grades of A plus, meaning more than 25 percent of their stations offer fuel containing 15 percent or 85 percent ethanol.

The Renewable Fuels Association, a trade group representing the ethanol industry, said unbranded or independent stations were four to six times more likely to offer E85 and 40 times more likely to have E15 than a location carrying a sign with the “Big Five” oil companies of BP, Chevron, ConocoPhillips, ExxonMobil and Shell.

The reason, the trade group contends, is oil companies use “strong-arm tactics and covert practices” such as strict franchise agreements and tough penalties to prevent or discourage retail stations from selling fuel with higher ethanol blends. Most gasoline today contains 10 percent ethanol.

The study said of the nearly 48,000 retail gas stations nationwide that carry a “Big Five” oil company brand, fewer than 300 (0.6 percent) offer E85 or E15. Most oil-branded station chains received an F, a grade that meant less than 1 percent of their branded stations offered the fuel. There are an estimated 150,000 retail gas stations in the United States.

Other gas station operators in the Des Moines area received mixed grades: Hy-Vee, with only 4 percent of its stations selling E85 or E15, got a C; while Casey’s General Stores and QuikTrip each got an F, with 0.1 percent and 0.0 percent of their stations, respectively, offering the fuel.

“There is a market for higher ethanol blends,” said Bob Dinneen, president of the Renewable Fuels Association. “Consumers need to have options. They want to lower their gasoline bill, and higher ethanol blends would allow them to do so, but the oil companies, particularly the Big Five, simply don’t want to provide market access and are using every tool in their monopoly toolbox to deny consumers that lower-cost option, to deny competition.”

Carlton Carroll, a spokesman with the American Petroleum Institute, which represents more than 550 oil and natural gas companies, had little comment on the report except to say that where E85 is sold, consumers are not buying it.

“This report isn’t worth responding to,” he said. “The alarmist language belongs in a Hollywood movie, not in a public policy debate on what is best for consumers.”

The report comes as the Environmental Protection Agency, which oversees the mandate that refiners blend ethanol into the country’s gasoline supply, is expected to announce in the next several weeks the amount of ethanol that is supposed to be blended this year.

EPA Administrator Gina McCarthy told reporters Tuesday that the blending requirements would be issued “soon.”

“We want to make sure the final clearly reflects that interest…. We’re taking the time to get this right,” McCarthy said.