WASHINGTON, March 20, 2013 – The Renewable Fuels Association (RFA) requested Tuesday that the federal government conduct a multi-agency investigation into “highly discriminatory and unlawful conduct” by oil companies that it says has hindered the distribution of renewable fuels.

RFA President Bob Dineen sent a three-page letter asking the Environmental Protection Agency, the Federal Trade Commission, the Energy Department and the Agriculture Department to investigate.

Dineen said the government has taken steps since 1980 to remove regulatory and market barriers that would prevent the introduction of renewable fuels, such as E85, biodiesel and E15. In addition, the government has mandated the production and, ultimately, the consumption of renewable fuels, Dineen said.

“However laudable these and other efforts, the oil industry is blocking the delivery of alternative fuels in a desperate attempt to maintain its monopoly over the fueling of America’s cars, trucks, and light-duty vehicles,” Dineen said. “Just as troubling, ‘Big Oil’ is actively undermining the delivery of renewable fuel even while simultaneously claiming that it is impossible to meet purposefully increasing RFS mandates. As a result, unless executive action is taken, the federal government will have lifted major regulatory barriers to the introduction of renewable fuels, only to allow the oil industry to wield its market power to effectively block the delivery of these fuels to the American public.”

To illustrate his point, Dineen included a recounting of recent events at Zarco 66, the first marketer in the United States to offer E15.

For many years, the ConocoPhillips franchisee, Zarco 66, offered E85 at its fueling station, Dineen said. One of the station’s fuel tanks contained “regular” gasoline and a second tank contained straight ethanol—a tank that might have otherwise been reserved for “premium” gasoline at a more antiquated station, he said.

Zarco 66 offered customers E85 by blending the appropriate mixture of gasoline and ethanol straight at the pump—using “blender” pumps that it obtained through a grant administered by the Energy Department, he said.

“Because only certain vehicles can use E85, the oil industry likely viewed this alternative fuel as a gimmick—one that posed no real threat to the industry’s monopoly,” Dineen said. “But shortly after Zarco 66 became the first fueling station in the nation to offer E15—a fuel that can be used in any light-duty vehicle manufactured over the last decade—the oil industry suddenly changed its tune.”

He said that ConocoPhillips quickly threatened to terminate Zarco 66’s franchise agreement and charge steep penalties unless it started offering “premium” gasoline—gasoline that would replace the ethanol housed in one of Zarco 66’s fueling tanks.

Dineen said there are “several concrete examples” of the oil companies violating U.S. laws.

“For franchisees like Zarco 66, the message that the oil industry is delivering is loud and clear: Stop selling renewable fuels, or face the consequences,” he said. “An oil franchisor holds appreciable economic power over the franchisee, which it is using to force franchisees to purchase premium fuel that they might not otherwise wish to carry.”

The letter came a few days after the RFA and other renewable fuel industry stakeholders held a press conference call to deride oil industry claims that ethanol is causing a 10-cent increase in gasoline prices.

“It’s just nonsense,” Dineen said during the call. “The bottom line is ethanol and the RFS…are saving money at the pump today.”


To read the letter, visit http://ethanolrfa.3cdn.net/73ef5a117ce5c1e112_9fm6b98iw.pdf




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