Oil and ethanol industries renew hostilities over mandate

Source: By John Siciliano, Washington Examiner • Posted: Thursday, January 10, 2019

The oil and ethanol industries showed Tuesday that they are eager to renew hostilities with each other over the Environmental Protection Agency’s renewable fuel program and ethanol mandate, no matter that the government is closed.

American Petroleum Institute CEO Mike Sommers kicked things off while presenting the first State of American Energy report he’s published as head of the oil and natural gas industry’s lead trade group. In the recommendations for the EPA’s Renewable Fuel Standard, the report called for sunsetting the ethanol mandate.

For the oil industry, it is simple: The program, which mandates that they blend billions of gallons of corn ethanol in gasoline and costs them billions of dollars, is “outdated and broken,” while placing consumers at risk. Therefore, the program should be either killed off or “significantly overhauled,” the report said.

The mandate has been a point of contention between the industries, lawmakers, and even President Trump, who failed to broker a deal between the industries on cutting the cost of complying with the federal program. The program requires most oil refiners to purchase hundreds of millions of dollars in ethanol credits to meet the program’s requirements each year.

The oil industry also is opposing Trump’s plan to allow higher concentrations of ethanol to be blended in gasoline year-round, which the oil industry says will harm car engines.

The group claims that the oil industry’s success has made the ethanol mandate “obsolete.” The U.S. is now the largest oil and natural gas producer, which has made it far less reliant on foreign oil producers than when the EPA ethanol program was passed into law over a decade ago.

The oil industry’s negative view of the ethanol mandate isn’t news to the ethanol industry. But the continued antagonism does show that continuing fighting over the Renewable Fuel Standard isn’t going away any time soon.

Geoff Cooper, the head of the ethanol industry’s top trade group, the Renewable Fuels Association, vowed to “continue to fight” for the choice the ethanol industry brings to the consumer at the pump.

“The Renewable Fuel Standard has been an unmitigated success, helping to clean the air, boost rural economies, lower fuel prices, and break up the oil industry’s near monopoly at the pump,” Cooper said in responding to Sommers’ report.

Cooper said that he and his allies will “vigorously” defend the mandate.

Legislation is being drafted in the Senate and the House to sunset the corn ethanol piece of the Renewable Fuel Standard in 2022.

The mandate requires refiners to blend a range of biofuels into the country’s gasoline and diesel supplies, but corn ethanol makes up the largest chunk of the biofuel standard to date.

Other groups such as the Competitive Enterprise Institute also called on Tuesday for the ethanol program to be killed off in the 116th Congress.