Legislation would ease E15 introduction into U.S. market

Source: Amanda Peterka, E&E reporter • Posted: Friday, March 30, 2012

A broad coalition of groups in the transportation fuels arena is cheering bipartisan legislation that would ease the introduction of the fuel blend E15 into the U.S. marketplace.

The legislation, introduced yesterday in both the House and Senate, would allow both traditional and renewable fuels to be stored and dispensed with common equipment. The bill would make it easier for retailers to sell E15, or gasoline blended with 15 percent ethanol, with equipment that’s already in the ground.

“This is really about giving customers more choice and better prices at the pump by empowering retailers to market multiple fuels using the same equipment,” said Sen. John Hoeven (R-N.D.), who yesterday introduced the bill in the Senate.

The bill, known as the “Domestic Fuels Act of 2012,” would also provide liability protection for retailers, engine manufacturers and fuel producers against any problems that occur as a result of using E15, or any other fuel approved for use by U.S. EPA.

Co-sponsors of the bill are Sens. Roy Blunt (R-Mo.), Amy Klobuchar (D-Minn.) and Mike Crapo (R-Idaho). Rep. John Shimkus (R-Ill.) introduced a version on the House side.

A coalition of groups that don’t often align, including ethanol trade groups, the American Petroleum Institute and the National Association of Convenience Stores, are supporting the bill.

Oil companies such as Tesoro Corp. and Exxon Mobil Corp. are also pushing for the bill’s passage.

“If you support the Renewable Fuel Standard program and the policy sort of contained behind that, which is the introduction of renewable fuels, you really do have to support this legislation,” said Stephen Brown, a vice president and counsel with Tesoro.

The legislation is intended to protect those who produce and sell fuel blends from litigation. When E10, or gasoline blended with 10 percent ethanol, was introduced, boat owners filed a lawsuit against oil companies alleging the firms had not warned them about the destructive effects of the blend on their engines.

Opponents of E15, including auto trade organizations, say that the blend has the potential to damage cars and that E15 is excluded from engine warranties.

EPA has approved E15 for use in vehicles from model year 2001 and newer.

“With some of these increased ethanol mandates put on by the federal government, a lot of people that run the local gas stations have real concerns that they’re opened up to tremendous new liability just by complying with the law,” Shimkus said, “because some of these higher blends of ethanol are unproven and may actually do damage to cars.”

Bob Dinneen, president and CEO of the Renewable Fuels Association, said the legislation would also break down some of the regulatory barriers slowing the introduction of E15.

“It would establish an alternative pathway so that they [companies] can demonstrate the equipment they would be using for E15 would certainly be safe and appropriate for increased ethanol or other biofuels,” Dinneen said.

Speaking yesterday on the Senate floor, Hoeven said the “common-sense” legislation would lessen the restrictions not only on renewable fuels but also on natural gas and traditional petroleum.

“When we talk about producing all of the above, let’s actually produce all of the above,” said Hoeven, a strong advocate for building the Keystone XL pipeline from Canada to the Gulf of Mexico. “Let’s not say all of the above and then block energy production.”