Frank Macchiarola press call remarks on RFS final volumes 2018
As prepared for delivery
RFS final volumes 2018
Frank Macchiarola, API downstream group director
Good morning and thank you for joining our call.
As the EPA prepares the final volumes for 2018 under the RFS mandate, I would like to remind policy-makers that this broken mandate is in need of a legislative fix. In the meantime, we urge the administration to keep renewable volumes at a low enough level to avoid a potential breach of the blend wall.
Why do I say this program is broken? Well, the RFS mandate was established a decade ago in an effort to expand our use of renewable fuels while reducing reliance on imported oil. Since then, the United States has undergone a transformation from a nation of energy dependence and scarcity to one of energy security and abundance. America has significantly increased domestic crude oil production and transitioned from a net importer of refined petroleum products to a net exporter. Bad policies, like the RFS, threaten this progress.
Additionally, this mandate could force consumers to buy higher levels of ethanol than most engines can accommodate, putting engine systems at risk. Today, most gasoline contains 10 percent ethanol by volume. However, if the RFS requirements continue to be implemented, our nation could exceed this level of ethanol in the fuel mix.
Automakers have warned these increased blends of ethanol could void car warranties. Testing by the auto industries found that higher ethanol blends, such as E15, could harm engines and fuel systems and potentially impose costly repairs on consumers. Nearly 85 percent of the vehicles in the U.S. fleet were not built for E15, and this fuel is not compatible with motorcycles, boats, lawn equipment, and ATVs.
To be clear – we are not opposed to ethanol. However, we are opposed to a mandate that pushes higher levels of ethanol into the fuel mix based on a mandate that is outdated and broken. The result is a bad deal for consumers.
Finally, we appreciate the administration’s leadership in addressing the RFS issue in the context of America’s new energy reality. And, we think it is irresponsible for supporters of this broken mandate to put at risk important work of federal agencies by holding up nominees in exchange for RFS concessions. This should not be allowed to continue and we will do what is needed to keep Congress focused on the important policy matters rather than short term politics. In the end, it will be up to Congress to repeal or significantly reform this outdated and broken program and we continue to urge quick action on this important issue.
The reality is market forces, technological innovations and investments by oil and gas industry have combined with increased domestic crude oil production to supersede goals of the broken RFS.
In the meantime, EPA is attempting to implement a broken program. To most effectively do so, we urge EPA to set its final 2018 RFS obligations for ethanol at or below 9.7 percent of gasoline demand, an amount that allows for E0 sales and recognizes the vehicle and infrastructure constraints that limit the ability to use E15 and E85.
We continue to urge lawmakers to work together to find meaningful and long-term solutions that address the potential harm that the RFS could bring to the nation’s consumers through higher energy costs and repairs to their engines.
Thank you, and now I’ll be happy to take any questions you have.