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Wilson Rogers & Associates

 

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May 1, 2015                            

PMAA RESPONDS TO RFA'S CLAIMS ON HIGHER ETHANOL BLEND COMPATIBILITY WITH CURRENT UST SYSTEMS

Today, PMAA responded to the Renewable Fuels Association's (RFA) claims that PMAA provided misleading statements in written comments to the House Energy and Commerce (E&C) Committee regarding the economic competitiveness of ethanol, E10 plus blend compatibility with existing underground storage tank (UST) system equipment at retail gasoline stations, the cost of installing infrastructure to distribute E10 plus blends and the retail sectors' acceptance of E85 blends. In March, PMAA submitted comments to the Committee in response to a hearing held entitled "21st Century Energy Markets: How the Changing Dynamics of World Energy Markets Impact our Economy and Energy Security." The Committee sought feedback on the rapidly changing energy market. PMAA focused a segment of its letter on ethanol's competiveness with traditional motor fuels and highlighted its concerns with UST system compatibility. RFA responded to PMAA's letter, but unfortunately, RFA missed the point.

RFA essentially claimed that higher ethanol blends are compatible with current UST systems and are competitive with gasoline. RFA is far from the truth. PMAA's response letter to the Committee rejects RFA's assertions that current UST systems are compatible with higher blends of ethanol. PMAA told the Committee the issue of UST system compatibility is first and foremost a legal question that the RFA completely ignores. Simply stating that UST system equipment is compatible without any legal means to prove it, as RFA does in its rebuttal letter, has no basis in law and is intended solely to distort the E15 issue. PMAA pointed out that actual compatibility does not rise to the level of legal compatibility under the regulations and standards that tank owners must follow to remain in compliance. Compatibility is a legal standard that RFA attempts to paper over with incomplete data, false accusations and wishful thinking. PMAA also continues to maintain that E85 fueling pumps are unlikely to achieve meaningful growth without billions of dollars in government subsidies for installation of legally compatible underground storage tank systems and dispensers capable of handling higher content ethanol blends. Politically, such subsidies are unrealistic.

Furthermore, PMAA reiterated that it stands by its comment that low oil prices impact the competitiveness of ethanol blended fuel. Data from the Energy Information Administration (EIA) and DOE clearly supports PMAA's statement that ethanol must be priced approximately 30 percent lower than gasoline for motorists to achieve similar energy content. As gasoline prices plummeted, so did retailer acceptance of higher ethanol blends.

PMAA continues to support the retail sale of ethanol blends but only so long as it is safe and legal to do so.  

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