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Iowa’s Fuel Retailers: When consumers have a choice, there is no “blend wall”

JOHNSTON, IOWA – Iowans from all over the state today flocked to Kansas City, Kan. to Rally for Rural America and urge the Environmental Protection Agency (EPA) to increase renewable volume targets under the federal Renewable Fuel Standard (RFS) at a public hearing on the Agency’s recent proposal to dramatically cut the nation’s use of cleaner-burning biofuels.

“The EPA is not responding to an infrastructure shortage for higher ethanol blends with this proposal, the EPA is creating it,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw in his testimony to the EPA.  “A strong RFS provides the incentive for retailers to offer higher ethanol blends to their customers.  By slashing the RFS, the EPA slashes that incentive.  This fundamental flaw in EPA’s understanding of the RFS and market dynamics must be addressed and corrected if we are ever to achieve the market competition goals Congress outlined when passing the RFS.”

“Iowa epitomizes the success of higher biodiesel blends,” stated IRFA Policy Director Grant Menke in his testimony to the EPA.  “Since the RFS was expanded in 2010, Iowa’s total biodiesel sales have quadrupled, largely as a result of the average biodiesel blend level skyrocketing from 3.1 percent to 9.4 percent.  This remarkable growth in the availability and use of higher biodiesel blends in Iowa is just one of many compelling reasons that EPA can and should increase its proposed biomass-based diesel volumes for 2016 and 2017 to at least 2 billion and 2.3 billion gallons respectively.”

“Iowa retailers have been successful with E15 and have seen the more environmentally-friendly fuel make up nearly 50 percent of their total fuel sales,” stated IRFA Managing Director Lucy Norton in her testimony to the EPA.  “The fact that EPA failed to grant a vapor pressure waiver for E15 prevents its sale during the summer, causing E15 sales to plummet during this period.  If EPA simply equalized the vapor pressure treatment of E15 and E10, they can make the most successful energy policy to date, the RFS, even more widely successful in achieving its energy security, economic and environmental goals.”

Along with renewable fuels industry representatives, several Iowa fuel retailers also attended the hearing to testify in support of higher renewable fuels volumes under the RFS.

“Due to EPA’s flawed RVP policies, E15 has run up against a wall of restrictions that do not fairly allow it to be sold in the same manner as E10,” stated Farmers Cooperative Creston Branch Manager Darin Schlapia.  “I believe granting E15 the same one pound waiver as E10 in the summer would enable E15 to become the new standard fuel sold in the United States, boosting ethanol demand by 50 percent… At our stations, ethanol blends of E15 and higher account for 40 percent of our total ethanol blend sales.”

“Since opening, we have observed only positive economic results for motorists and our community,” stated Cresco Fast Stop President Dave Sovereign.  “The past year’s sales data shows that 73 percent of our total gasoline sales volume have come from the higher ethanol blends of E15, E20, E30 and E85…proving that when consumers have a choice of fuels to purchase, there is no blend wall.”

Sovereign added, “The Environmental Protection Agency should not be restricting the use of a clean-burning renewable fuel such as ethanol, but rather should be working to promote its growth as a chief source of motor vehicle fuel for both the positive economic and environmental impacts on communities.”

“Between September 16th and May 31st, 47 percent of the gasoline we sell is E15. Our customers like the fuel’s performance,” stated STAR Energy Manager of Retail Fuels Marketing and Business Development Jason Stauffer.  “I believe that it’s time to grant the one pound waiver to equalize the vapor pressure regulations for E10 and E15 during the summer driving season, running from June 1 through September 15.  It is time to allow my customers the right to choose the lowest-cost ethanol blend during the summer.  I am confident that if I could offer this blend year-round, without the current restrictions, many of my customers would choose E15.”

On May 29, 2015, the EPA proposed to significantly reduce renewable fuels targets for 2016 under the federal RFS, citing concerns of Big Oil’s fabricated “blend wall”.  In an attempt to receive public comment on the issue, EPA is holding a public hearing today at the Jack Reardon Center in Kansas City, Kan.  More than 250 individuals signed-up to testify at the hearing, and many more renewable fuels supporters participated in a Rally for Rural America near the hearing location.

Iowa is the nation’s leader in renewable fuels production. Iowa has 43 ethanol refineries capable of producing more than 3.8 billion gallons annually, including 22 million gallons of annual cellulosic ethanol production capacity and one cellulosic ethanol facility currently under construction. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually.

The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development.

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For more information, visit the Iowa Renewable Fuels Association homepage at: www.IowaRFA.org