"Any time you have the administration commit resources to build out infrastructure so consumers use more domestic renewable fuels, that's a good thing," Robert Dinneen, president of the Renewable Fuels Association, said on the TV program Platts Energy Week.
Dan Gilligan, the president of the Petroleum Marketers Association of America, agreed that the announcement Thursday by Agriculture Secretary Tom Vilsack that the administration would help pay for the installation of blender pumps and storage tanks for greater blends of ethanol in gasoline was good.
"This is an economic decision that retailers are making," Gilligan said on the program. Among the questions on whether government aid will help retailers decide, he said, are: "Is the juice worth the squeeze? Is the investment they're going to make in new technology going to pay off over the
long run?"
Both Dinneen and Gilligan said higher concentrations of ethanol in gasoline, which blender pumps would support, will only become widespread when more flexible-fuel vehicles hit the road. Such vehicles can use fuels with ethanol content of up to 85%.
Despite their praise for Vilsack's announcement, Dinneen and Gillgan reiterated industry concerns over an Environmental Protection Agency decision earlier this month to allow fuel blends with as much as 15% ethanol for vehicles built since 2007. Until then, EPA sanctioned only ethanol blends of up to 10%, which are common at gas stations across the US.
RFA maintains that the E15 decision is insufficient; PMAA says it goes too far.
"Quite frankly, science would suggest that any vehicle on the road today can use E15," Dinneen said. "That's what studies are showing. [Officials at EPA] want to have more studies done. They want to dot every i and cross every t. But, you know, in Brazil for 20 years they've used as much as E25. So,
we're not talking about a great technological leap forward."
PMAA continues to worry about the potential for engine problems from E15, which Gilligan said is not specifically addressed in automaker warranties for cars and trucks. The trade association is urging Congress to pass a legislation absolving retailers of any liability for engine damage from the
higher ethanol blend.
Moreover, the limited expansion of ethanol blending approved by EPA means retailers will not rush to change their pumps to dispense E15, Gilligan said.
"It's a tiny number of cars that can run on E15," he said. "So, retailers aren't going to rush out and offer this fuel if only a very small portion of the market can handle it."
Separately, Gilligan said Congress may extend a tax credit for ethanol during a lame-duck session after the November elections, but not change the incentive, as some in the ethanol industry have urged.
The credit, worth 45 cents/gallon for blending ethanol into gasoline, as well as a tariff of 54 cents/gal for ethanol imports, are scheduled to expire in December.
Meanwhile, the ethanol industry continues to discuss with administration officials and lawmakers possible changes in the tax credit to make it more effective for the industry and less costly to taxpayers, Dinneen said.
One idea under consideration, he noted, is limiting the credit to ethanol producers, not blenders, which often are petroleum companies.
"There are a number of proposals that need to be vetted," Dinneen said.
"The important thing is that the nation's commitment to renewable fuels continues because we've made great progress. But we need to do more."
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