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Battle lines drawn in fight over fuel standards

Last Thursday, I urged getting behind a petition under consideration at the Environmental Protection Agency to reform the Renewable Fuels Standard. It prompted some great dialogue, as the subject of ethanol always does. And while there was some disagreement about any real environmental benefits from ethanol, there was full agreement that it can destroy hundreds of thousands of engines from marine to mowers.

The Marine Retailers Association of the America’s Washington lobbyist Larry Innis backs up my statement that any revision of the fuel standard won’t be easy. Apparently the battle lines have clearly been drawn.

The Glover Park Group, a Washington lobbying firm, has reportedly been hired by pro-ethanol interests to wage a multimillion-dollar campaign opposing any changes to the current fuel standard, according to E&E Publishing’s Greenwire (www.eenews.net). What’s notable is that Glover Park is the same lobbying group that was hired to do the exact opposite in 2008 i.e. quash support for the Renewable Fuels Standard mandate and ethanol.

Writing in Greenwire, Amanda Peterka reported that an ethanol industry insider revealed Glover Park was hired by Growth Energy (a familiar ethanol group), DuPont and the Renewable Fuels Association. The latter group’s president Bob Dinneen reportedly said in a June blog post that “wolves were at the door of the U.S. ethanol industry,” an obvious reference to the growing demand that the EPA waive the existing fuel standard that mandates ethanol be blended in gasoline supplies.

A key reason for the heightened call for Renewable Fuels Standard reform is the drought that’s negatively impacted more than 80 percent of this year’s corn crop. Still, some 40 percent of the corn crop will go into ethanol. Moreover, the nation’s poultry and livestock industries are facing record high prices for corn feed. That, in turn, has triggered higher food prices and raised a long and overdue discussion about whether we can really justify putting our food in our gas tanks?

Here’s a twist: the ethanol industry blamed Glover Park for creating the food vs fuel debate when it represented the Grocery Manufacturers Association and lobbied in opposition to ethanol back in 2008. In fact, Growth Energy’s website labels the food vs fuel debate “pure fiction” and attributes it to something “spun by a wealthy industry group (the Grocery Manufacturers Association) through a well-connected D.C. public relations shop (Glover Park).”

But now, Glover Park will get big bucks to discredit the food vs. fuel debate it supposedly created. Greenwire reports Glover Park’s strategy will be to make the fuel standard a partisan issue by building support with Democrats for ethanol and biofuel support.

It’s also notable that the National Marine Manufacturers Association joined the Grocery Manufacturers Association and other concerned organizations in suing the EPA to stop the increase of ethanol from E10 to E15. Sadly, a D.C. court coped out of rendering a decision simply by dismissing the suit without ever considering the case.

Possible continued litigation notwithstanding, it’s clear the road leading to a much-needed reform of the Renewable Fuels Standard will be a tough one, with well-funded opposition at every turn. Still, it’s an issue on that boating interests must weigh in on. So again, I encourage you to learn more by getting on the email list at www.smarterfuelfuture.org and going to www.regulations.gov to submit your comment to EPA.

Comments

7 comments on “Battle lines drawn in fight over fuel standards

  1. R.Pawlicki

    The simple solution would require the gas stations that sell ethanol at 10 or 15% mix to have one gas pump available with non destructive unleaded for use by those engines that could be damaged by ethanol.
    Right now the chances to get a repeal of the 15% or 10% ethanol gas is slim because the farmers would suffer in two ways, by loss of high market demand for corn and also in land value depreciation if corn prices drop. In addition the gas producers that were mandated to blend in the ethanol are now set up to use it and they are dependent on ethanol to boost the octane value of their products. It’s hard to go backwards so why fight it – just go for having what your boat engines need at the pump.

  2. CaptA

    Norm,

    I tihnk using E10 in gasonline-powered engines is generally acceptable. In marine engines, companies like Envinrude have given it their blessing. That being said, ethanol is hydrophillic. Put a boat in a humid environment near the ocean or bays and I am sure there is a greater risk of getting water in the fuel–not good. Clearly as the ethanol volume percent increases, so does the rate some engine parts deteriorate (in addition to the water in the fuel). Additionally, I do definitely agree with your point about food prices (corn) being affected by the drought and therefore it is related to ethanols use in fuels. These are all excellent point. At the same time I do not think we as an industry should be just fighting the EPA. We as an industry SHOULD BE OFFERING ALTERNATIVE IDEAS TO FIND MUTUALLY BENEFICIAL SOLUTIONS.

    I have a theory–we see the combativeness in the Congress and Whitehouse and we (US Citizens) somehow take that as a model to act. Historically, this has never been the way the USA has solved its most serious of issues. I believe energy/environment is one our most serious issues. I think it is in our industry’s interest to promote cost-effective solutions in reducing energy use/fuel emissions and our environmental imprint. Our next wave of customers I.e., Gen X and Gen Y are demanding it. So if we plan to sell more boats, we better meet that demand.

  3. john ennis

    This is a bottom line battle…who ever has the most money to spend on spin doctors in Washington..wins.The Marine industries best chance at geting John and Jane Doe to raise hell with their senators and congressmen is to hit the food price angle and hit it hard..and that takes a alot more money then the Marine industry can probably raise. In Washington..MONEY Always talks.

  4. George

    The answer is simple, lobby for more domestic drilling and add refining capacity. Supply will find market demand and prices will be a whole lot lower in the free market system

  5. AnonymousBob

    George: the fuel industry already operates in a free market. The US is a net exporter of fuel, so the supply is finding its demand outside our boundaries. A majority of fuel pricing nowadays is driven by speculators that own 70%+ of fuel contracts now.

    CaptA: Evinrude does not bless ethanol fuel. They merely state, “motors can tolerate up 10% alcohol in fuels…” Any engine company that “blesses” ethanol is asking for serious trouble. There needs to be soething done to roll back the ethanol requirement, stop the E15 issue, or at least make sure E10 remains the max. It’s a steep hill given the lobbying money of the fuel industry.

  6. CaptA

    @George,

    Oil and gasoline prices will not come down due to net increases in domestic oil extraction for a simple reason–Supply and Demand. OPEC is the single organization in the world with the largest percent of oil supplies, so they effectively control supply. If the USA starts increasing oil production, OPEC will decrease oil production– maintaining world supply at what ever level they see fit. Now as to domestic oil refining capacity–US oil refineries are operating an 80% of production capacity. It is cheaper to import refined gasoline from europe than it is to produce it on the east coast. Why? Because europe primarily uses diesel in their cars over gasoline. Europe has an over supply of gasoline so they sell it to the USA at a price lower than we can refine it here in the US. When crude oil is run through a distillation column, a lot of straight-run gasoline is produced from the crude.

    In other words drilling more for oil will not change the price of gasoline. It will however make us less dependent on foreign oil, which does help us with national security issues.

  7. CaptA

    @AnonymousBob,

    I stand corrected. And you are correct about the speculators. With regards to net exports–that used to be the case–it is no longer. We actually import some gasoline now because it is cheaper than refining it here in the US.

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