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Gerard: Stakes too high for inaction on broken ethanol mandate

WASHINGTON, June 5, 2013 – API President and CEO Jack Gerard called for an immediate waiver from EPA and full repeal of the Renewable Fuel Standard (RFS) during his testimony at a hearing before the U.S. House Committee on Oversight & Government Reform Subcommittee on Energy Policy, Health Care and Entitlements:

“The Renewable Fuel Standard is irreparably broken and could cause significant harm to consumers, the economy and the nation’s fuel supply,” Gerard said. “Most cars on the road today were not designed to use more than 10 percent ethanol mixed with gasoline, and we are getting close to passing that threshold because of ever increasing ethanol mandates.”

Gerard cited a study by NERA economic consulting that predicts once ethanol mandates are higher than can be safely blended into the nation’s fuel supply—known as the 10 percent ethanol blend wall—the cost of diesel could increase by 300 percent and the cost of gasoline could increase up to 30 percent by 2015. In broad economic terms, by 2015, the RFS could cause a $770 billion decrease in U.S. GDP and reduce take home pay for American workers by $580 billion, according to the study. A blend of 15 percent ethanol and 85 percent gasoline (E15) can damage engines and cause vehicles that use it to break down—even vehicles that EPA has approved to use the fuel—according to Coordinating Research Council’s (CRC) testing (here and here).

“The blend wall and its harmful impact could be prevented today if EPA would simply use its waiver authority to keep volumes below 10 percent,” Gerard said. “Not only could these out of control ethanol mandates be costly, they could also present a big risk to consumer safety.”

API is a national trade association that represents all segments of America’s technology-driven oil and natural gas industry. Its more than 500 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation’s energy. The industry also supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $85 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.
  • Biofuels
  • Economy
  • Safety