Surprise guest crashes ethanol briefing

Source: Written by Christopher Doering, Argus Leader • Posted: Friday, May 3, 2013

Oil industry rep defends fuel standard law

WASHINGTON, D.C. — The contentious battle between ethanol and Big Oil took its latest twist Thursday when an event hosted by the renewable fuels industry drew an unexpected guest.

The surprise visit happened during an ethanol industry briefing for congressional staffers in Washington. Ethanol supporters at the event aggressively spoke out against a push by the oil industry that aims to roll back or end the federal Renewable Fuel Standard — an 8-year-old law that requires refiners to use alternative fuels from corn, soybeans and other products in the country’s gasoline supply.

“I just don’t want misinformation going out,” Marcus Koblitz, an analyst with the American Petroleum Institute, told the packed room during a time when the audience could ask representatives from the ethanol industry questions. “I haven’t seen a producer bash their primary consumer as much as the ethanol industry does.”

Monte Shaw, executive director of the Iowa Renewable Fuels Association, remained stoic for a moment before putting an end to the remarks.

“You guys have the resources to get your information out. Take some notes,” Shaw said. “We’re going to disagree. I don’t like how you guys talk about our product. I’m not going to your staff briefing and stand up and do this.” Shaw then told Koblitz he was welcome to stay for the remainder of the event, which he did.

In recent months, the ethanol and oil industries have ratcheted-up the attacks against the other to protect their market share amid growing momentum in Washington to change the controversial Renewable Fuel Standard.

Lawmakers have proposed legislation that would make significant changes to the mandate, for example capping the amount of the renewable fuel allowed in gasoline at 10 percent. Most gasoline today contains E10 — a mix of 10 percent ethanol and 90 percent gasoline, but an E15 blend also has been approved by the Environmental Protection Agency.

There also is the possibility that the EPA could decide to reduce how much advanced biofuels must be produced this year, pushing the overall renewable fuel volume lower. In January, the EPA proposed the production of 2.75 billion gallons of advanced biofuels as part of a broader output of 16.55 billion gallons of renewable fuels this year.

Ethanol groups Thursday accused Big Oil of using “scare tactics” and “bogus” studies to prevent more of the corn-based fuel from being included in the country’s motor fuel supply.

Meanwhile, the oil industry has claimed it has hit the “blend wall,” a threshold where refiners are reluctant to blend gasoline with more than 10 percent ethanol because most automakers say their cars are not equipped to handle the higher blend rate. They also are reluctant to back a 15 percent ethanol blend approved by the EPA, citing a lack of demand from the public and concern from gas station operators and refiners who are fearful they could be held liable if the fuel damages automobile engines.

“We have been offering blends of ethanol from zero to E85 at our station for nearly five years, and year after year, my customers buy an average of 20 to 25 percent ethanol,” said Bruce Vollan, owner of Midway Service in Sioux Falls, who was one of the speakers at the event. “Despite what the so-called ‘experts’ say, we haven’t had to pay a single repair bill during that time. I think we’ve shown that, given the choice, customers are smart enough to know what works in their engines and, given the choice, they will buy more ethanol.”

Shaw said he is confident that Congress and the EPA would not succumb to the “rhetoric” and they would resist making changes to the Renewable Fuel Standard.

“We’ve been through this before,” Shaw said. “Time will show that (the oil industry) is wrong.”

South Dakota is the nation’s fifth-largest renewable fuels producer. Last year, the state produced more than 1 billion gallons of ethanol.