API Ads Target RFS

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By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- In launching a new anti-Renewable Fuel Standard campaign during the heart of the presidential campaign, an American Petroleum Institute official said Tuesday the oil industry hopes to keep momentum going on reform or repeal of the law into the next administration.

API launched two 15-second television ads this week calling for the repeal of the RFS. API Downstream Group Director Frank Macchiarola told reporters Tuesday the plan is to pick up where the oil industry left off with a bill co-sponsored by Reps. Bill Flores, R-Texas, and Peter Welch, D-Vt.

"Newspapers agree, end harmful fuel mandates because it's a bad idea," one television spot says. "Bad for our consumers and bad for our cars. It's time. End harmful fuel mandates. Tell Congress you agree. Fix the harmful Renewable Fuel Standard."

During a news conference, Macchiarola repeated many of the talking points the industry has been saying for years during ongoing pursuits to repeal or reform the RFS.

"The American consumer is seeking relief from the broken and outdated RFS mandate," he said. "This mandate and the high ethanol blends it will bring can result in damaged engines and fuel systems, potentially forcing drivers to pay for costly repairs, according to extensive testing by the auto and oil and natural gas industries. This broken RFS mandate could also raise prices at the pump."

Yet, just last week the U.S. Department of Energy's Oak Ridge, Argonne, and National Renewable Energy laboratories released a report on the merits of higher blends. In summary, the research found blends of E25 to E40 burned in future-optimized engines would lead to increased vehicle efficiency, increased acceleration, and reductions in greenhouse gas emissions. The mid-level blends such as E25 and E40 have higher octane that allow engine makers to manufacture more efficient engines.

Macchiarola cited a recent poll conducted on behalf of API that showed 77% of registered voters polled are "concerned about government requiring increased amounts of ethanol in gasoline and 73% agree that federal regulations could contribute to increased costs at the pump."

In addition, he said a Congressional Budget Office report found meeting RFS volumes outlined in the original 2007 law would increase the cost by 26 cents per gallon at the pump.

"These new ads will help further inform voters about the potential dangers of the broken ethanol mandate, and increase calls on Congress to fix the RFS," Macchiarola said.

Back in May, Reps. Flores and Welch introduced the "Food and Fuel Consumer Protection Act." The measure has the backing of about 100 House lawmakers. The bill would direct the EPA to consider current market realities and cap the amount of ethanol blended at 9.7% of projected gasoline demand using Energy Information Administration data. The legislation also would require EPA to meet statutory deadlines in setting annual volumes. If not, EPA would be required to set RFS volumes at the previous volumes below the blend wall.

The blend wall is where total ethanol production exceeds the available market in transportation fuel. Getting beyond the E10 blend wall would help to create a broader market for corn.

PRESIDENTIAL CAMPAIGNS

Both Republican presidential nominee Donald Trump and Democratic nominee Hillary Clinton expressed support for the RFS during the Iowa caucuses.

Long-time ethanol supporter Sen. Charles Grassley, R-Iowa, however, questioned whether Clinton still supports the RFS in a news conference with agriculture reporters Tuesday. News reports surfaced last week that Clinton was seeking out advice from regulators at the California Air Resources Board on potential reform to the RFS. "She's not the pro-ethanol candidate she wants us to believe," Grassley said.

Yet Trump gave an economic speech Monday in Detroit in which he touted boosting domestic oil and gas production and made no references to renewable energy. Trump cited data in his speech from the Institute for Energy Research that is supported by the petroleum industry and has repeatedly released statements and reports criticizing biofuels and the RFS.

Emily Skor, chief executive officer of ethanol advocacy group Growth Energy, said in a statement Tuesday the new API campaign doesn't give consumers a complete RFS picture.

"The latest round of oil industry ads contain the same misleading claims they have been peddling for years, claims that have never held up," she said. "Both presidential candidates, House and Senate lawmakers, and experts from the across the country increasingly recognize that the RFS is the driving force behind newer, cleaner, more affordable options at the gas pump. Consumers are saving money, upwards of 50 cents to $1.50 per gallon when oil prices spike, because the RFS stops fossil fuel producers from imposing a monopoly on our options at the pump."

The Renewable Fuels Association said in a statement Tuesday the RFS has been a success.

"Despite what API's new TV ads claim, corn prices in many areas are at the lowest in a decade," RFA said.

"Retail meat prices are falling. Food prices have risen more slowly since the passage of the RFS than in the 25 years preceding the policy. Meantime, 85% of all vehicles on the road are legally approved by EPA to use more than 10% ethanol. Three out of every four new cars are approved and warranted by the manufacturer for E15. All motorcycles, boats, mowers, etc., are approved by the manufacturer to use E10 and it is not legal to use E15 or higher blends in those applications.

"The bottom line is: API continues to suggest the RFS is broken," according to the RFA. "But would API really continue to spend millions of dollars on anti-RFS advertising if the program wasn't working exactly as intended to reduce petroleum consumption, lower fuel prices and decrease emissions?"

View the API television ads here: http://bit.ly/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(AG/SK)