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Frank Macchiarola's press call statement regarding E-15 hearing

As prepared for delivery

E-15 hearing – Opening statement
Frank Macchiarola, API downstream group director

Good morning, and thank you for joining our call.

As drivers hit the road for their summer vacations, it is important that the American consumer is provided with a real choice in the fuels they use. The oil and natural gas industry and the refiners who help fuel America want to make sure they get the fuels they need and want. Senators at tomorrow’s hearing on S.517 the Consumer and Fuel Retailer Choice Act should find a lasting solution to the broken Renewable Fuel Standard instead of spending time on E15 legislation that does not fix the problem or help consumers.

The Consumer and Fuel Retailer Choice Act gives a false choice to the consumer as 85 percent of vehicles in the U.S. fleet were not built for E15 and it is not compatible with motorcycles, boats, lawn equipment, and ATVs. The choice offered in this bill is a bad one. Consumers don’t benefit from E15 gasoline. The fuel was inadequately tested by EPA and could harm engines and fuel systems. Testing by the Coordinating Research Council (CRC), which has been the gold standard in fuels and engines research for the better part of a century, determined that millions of vehicles on the road today could suffer engine damage from using fuels containing higher levels of ethanol than their designs can accommodate. Likewise, a separate CRC study found that fuel pump systems could seize up or otherwise be damaged by higher content ethanol fuel, not to mention the malfunction of the check-engine light (i.e., not coming on when it’s supposed to and coming on when it shouldn’t). The stakes are high for consumers who could be left stranded on the roadside and/or stuck with potentially expensive repair bills.

The legislation also reverses decades of EPA precedent and substantive Clean Air Act protections, while failing to comprehensively reform the broken RFS. We urge lawmakers not be distracted by this issue that avoids real RFS reform, and to put consumer interests ahead of ethanol interests.

Finally, this is not an ethanol verses oil issue; it’s about providing fuels consumers want and need. Drivers have made it pretty clear that they’re not interested in higher ethanol blends. The proof of this is in the demand numbers: E85 makes up less than one tenth of one percent of gasoline demand, while demand for E0 – clear gasoline with no ethanol – was about 4% of gasoline demand in 2015. In addition, restaurant and grocery associations, automobile manufacturers, and producers of poultry, pork, and beef are just a few of the groups speaking out against the problems associated with this broken mandate.

When the RFS mandate was revised in 2007, fuel imports and costs were on the rise, making the mandated use of corn-based ethanol seem to some like a viable option to lower both while reducing emissions. Then the American energy renaissance took hold, catapulting the United States to a position as the world’s leading oil and natural gas producer and refiner. In the last few years, petroleum consumption derived from imports reached its lowest level since 1970.

The primary goals of the RFS have been achieved, not by ethanol mandates but by market forces and technological innovations, leaving the policy with only hypothetical benefits but very real costs.

The energy landscape has shifted, but ethanol policy under the RFS remains stuck in the past. And American consumers could pay the price. Protecting consumers from outdated, unreasonable ethanol mandates should be a top priority for Congress and the EPA.