The Iowa legislature late last week adopted a bill that sponsors say guarantees the right of local retailers to sell ethanol and biodiesel blends of their choice.

Renewable energy advocates contend the oil industry is improperly protecting the petroleum share of the transportation fuels market by restricting the ability of local filling stations to offer fuel blends beyond the traditional E10 (10 percent ethanol gasoline) and B5 (5 percent biodiesel).

The legislation, which is based on a similar law enacted in South Dakota in 2011, is aimed at specific provisions in refiner supply agreements that sponsors say are anticompetitive. The Iowa measure prohibits supply agreement restrictions on fuels from other suppliers, the installation of blender pumps, the use of current equipment to distribute higher ethanol and biodiesel blends, the advertisement of ethanol or biodiesel blends and the locations on retail sites where higher blends can be offered. The legislation also prohibits suppliers from insisting retailers can accept only cash for higher blends.

The Iowa Renewable Fuels Association (IRFA) says the measure offers retailers a "bill of rights" that protects against "Big Oil efforts to restrict competition" and assures the sale of E15, E85 and B20.

“This legislation represents a solid step forward for higher ethanol blends, consumer choice, and the federal Renewable Fuel Standard (RFS),” said IRFA President Rick Schwarck. “I find it ironic that Big Oil consistently claims that retailers don’t want to sell higher ethanol blends like E15, yet they use every trick in the book to prevent retailers from offering E15.”

He said the oil industry’s principal trade group, the American Petroleum Institute, “fought tooth and nail to try to keep these retailer protections out of the bill. This bill tears down one part of Big Oil’s bogus blend wall in Iowa.”

“One supplier should not be allowed to dictate to local retailers what they can and cannot do with products from other suppliers,” continued Schwarck. “More freedom for retailers to offer the fuels they choose often means more ethanol and biodiesel blends, which benefits consumers by increasing competition at the pump. And it also means more RINs will be generated for use in complying with the federal RFS.”

The Petroleum Marketers and Convenience Stores of Iowa (PMCI) also lauded the measure, noting that fuel distributors and retailers led lobbying efforts to pass the new law to ensure they can blend ethanol and biodiesel products manufactured in Iowa.

“This legislation helps Iowa farmers, Iowa businesses and Iowa consumers by maintaining competitive fuel prices and promoting the state’s leadership position in biofuel production,” said Dawn Carlson, president of PMCI.

Iowa leads the country in the production of ethanol and biodiesel. The state has 41 ethanol refineries capable of producing more than 3.7 billion gallons annually and 12 biodiesel facilities with the capacity to produce nearly 315 million gallons each year. The state also has one wet mill and two cellulosic ethanol facilities currently under construction


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