THURSDAY, December 5, 2013 – Today, PMAA President Dan Gilligan testified before the EPA over the agency’s 2014 proposed RFS blending volume standards. Specifically, Gilligan highlighted petroleum marketers’ concerns about E15. Given underground storage tank (UST) system infrastructure legal and regulatory uncertainties, Gilligan argued that E15 is unlikely to solve the corn-based ethanol blendwall, and therefore, lowering the corn-based ethanol mandate to a level achievable up to an E10 blend with reasonable growth in E85 sales will avoid unintended consequences. “Another reason to lower the ethanol mandate is to prevent the loss of neat Premium in some markets. We are already seeing some refiner-suppliers blending E10 Premium, eliminating consumer choice to purchase fuel without ethanol. Currently, those customers are paying extra for Premium because they need ethanol free gasoline. If RIN values are exorbitant, ethanol-free gasoline could become totally unavailable in some markets, a very negative unintended consequence,” Gilligan highlighted.
EPA proposed a modest reduction to the 2014 RFS blending volumes, calling for 15.21 billion gallons of biofuels — including up to 13.01 billion gallons of corn-based ethanol — to be blended with gasoline. If EPA were to require 14.4 billion gallons of corn-based ethanol required under The Energy Independence and Security Act of 2007 (EISA) for 2014, refiners would likely hit the ethanol “blend wall” next year given the U.S. is expected to consume approximately 133 billion gallons of gasoline. PMAA supports lowering the corn-based ethanol mandate to approximately 13 billion gallons and maintaining it at this level for the foreseeable future to prevent higher levels of ethanol blended into the nation’s fuel supply.
PMAA will submit detailed comments on the agency’s proposed 2014 RFS blending volumes. The public comment period closes on Jan. 28, 2014.