Fuel industry pushes to keep high-ethanol blends off the market

Source: By Zack Colman, TheHill.com • Posted: Tuesday, August 21, 2012

The head of a top fuel industry group wants Congress to take action that he says would protect consumers by keeping a more corrosive blend of gasoline off the market.

American Fuel and Petrochemical Manufacturers (AFPM) President Charles Drevna told The Hill on Monday that a U.S. Court of Appeals of the District of Columbia decision last week will put consumers at risk. The court upheld an Environmental Protection Agency (EPA) policy that let gas stations offer fuel with a higher ethanol content.

Auto companies say the higher-blend ethanol fuel is more destructive to engines and is not covered by many consumers’ battery warranties.

In ruling that the EPA could let retailers offer E15 fuel — a mix of 15 percent ethanol to 85 percent gasoline — if they take proper measures to inform drivers of the risks to their cars, Drevna says the court failed to acknowledge that the blend is not suitable for most vehicles on the road.

“Decisions have to be made now. EPA was totally off base certifying a fuel that is incompatible with engines today,” Drevna said. “We don’t believe that putting a 4-square inch sticker on a gasoline pump that will warn consumers about misfueling is going to be effective. Misfueling is going to be inevitable.”

The court decision lets drivers fill cars made in the model year 2001 or later with E15 fuel, which covers two-thirds of the cars on the road today. Gas retailers, such as convenience stores, will need to properly label the pumps to inform customers about the gasoline. Fuel marketers and refiners will need to register their blends with EPA

Biofuels proponents say auto industry criticism of the E15 fuel is overblown.

They label the opposition as petroleum producers straining to shield the marketplace from outsiders. Biofuels industry groups also say E15 will help bolster research in other advanced fuels, a step supported by many lawmakers.

Drevna on Monday criticized the court decision as well as the renewable fuel standard (RFS), which he said is the main driver for E15.

The RFS requires refiners to blend 15 billion gallons of corn ethanol and 21 billion gallons of advanced biofuels — those made from non-food products — into traditional fuel by 2022.

Drevna took aim at Congress for expanding the RFS in a 2007 energy law, the Energy Independence and Security Act (EISA), saying that it created artificial demand for biofuels. He said refiners will now be obligated through the court ruling to churn out E15 blends even though there is no commercial market for advanced biofuels.

“What does the refiner do? Do they comply with EISA ’07 and risk customer outrage, or do we say, ‘You know what, Congress, we can’t comply with this without putting the consumer at risk. What are you going to do about this?’ ” Drevna said.

The market for E15 appears limited. Just one filling station in the country offers it, and many gasoline retailers fear they would be held liable for engine damage.

Drevna said AFPM will start contacting lawmakers when they return from recess. He added that they will “talk to the consumers,” but would not specify what that might entail. He also said there are a range of legal options to consider.

“There’s a lot of avenues that we have out there to let people know that we’re on their side,” said Drevna.

He said he hoped that the issue would help spotlight “this whole ethanol fallacy that’s been foisted on the American consumer over the last years.”

“The proponents try to paint this picture of Grant Wood’s ‘American Gothic’ out there when we all know it’s far from that,” said Drevna.