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Ethanol Dispute Gets Political


Ethanol Dispute Gets Political

Joe Donnelly

A dispute within the ethanol industry over the future of the RFS has become political. One of the barriers to getting more E15 and other higher blends of ethanol gasoline sold is the ability to sell it year-round. Currently, EPA regulations known as RVP keep e-15 and higher blends from being sold during the summer.  Indiana Senator Joe Donnelly has introduced legislation to eliminate those regulations, “We are working on our colleagues to try to make it that E15 can be sold year-round and that it will work with all the environmental rules.”

Renewable Fuels Association President and CEO Bob Dinneen praised Donnelly for his leadership on this issue, “I applaud the leadership of Senators Fischer, Donnelly, and Grassley, and Representatives Loebsack and Smith for calling attention to this critical issue that hinders stations from offering year-round access to E15 and other higher level ethanol blends. Major marketers like Thornton’s, Kum & Go, Sheetz, and RaceTrac already offer the fuel blend, but the industry is being hamstrung by EPA’s nonsensical disparate treatment of higher level blends.”

The oil industry has proposed that they would agree to dropping the regulations if the EPA would change the point of obligation, which means oil refiners would no longer have to blend the ethanol but leave that job for retailers. Donnelly and much of the ethanol industry oppose this deal, “This could be incredibly damaging to ethanol and our farmers, and I want I want all of our ag community to know that I am fighting this will all I have because it would make it much more difficult to ethanol to be used.”  According to Growth Energy, “Changing the point of obligation would immediately throw the program into chaos. Government regulators would have to begin a long and extremely complicated rulemaking that would at a minimum take 18 months, but would not likely be resolved for several years.”

Bob Dinneen

The question of changing the Point of Obligation has sparked a civil war between ethanol groups. The Renewable Fuels Association announced last week they would support changing the Point of Obligation in return for dropping the RVO. Growth Energy denounced the move and immediately distanced themselves from association with RFA.  “We remain opposed to changing the point of obligation because we are concerned that it would undermine the integrity of the program by creating a compliance mechanism that is unworkable, or that in a transition there would be disruption in the marketplace that would hurt the industry. If – and only if – those two concerns can be addressed, we’d be okay with moving the point of obligation,” said Dinneen, but added, “If the industry is at the same time able to secure additional opportunities for ethanol, it would be malpractice not to pursue those opportunities.”

There was a rumor last week that the White House was going to issue an executive order mandating a change in the point of obligation. It was later denied by Trump administration officials. Donnelly urged the White House to stand with farmers and the ethanol industry, “This makes no sense, and I promise all of our farmers in all 92 counties we are in this with everything we have to stop this.”

Jim Banks

Meanwhile in the House, Congressman Jim Banks (IN-03) today announced that he is supporting a bill to roll back current regulation that limits the sale of E15 fuel during summer months. Banks is co-sponsoring H.R. 1311, a bill that would undo the Environmental Protection Agency (EPA) regulation limiting the sale of E15 in the summertime. “Hoosiers should have options at the gas pump. Current regulation that limits E15 fuel in the summer is arbitrary and based on outdated science,” Banks said in a statement. “E15 fuel produces lower emissions than traditional gasoline, and it is cheaper. This bipartisan legislation would remove regulatory burdens that limit E15 use and expand options for Hoosier producers. We need the government to get off the back of the free market and allow consumers to access the most affordable fuel option available.”