RFA corrects PMAA's overblown assertions in letter

By Renewable Fuels Association | March 31, 2015

The Renewable Fuels Association recently sent a letter to the House Committee on Energy and Commerce to set the record straight and counter misleading and inaccurate statements about ethanol availability and infrastructure made by the Petroleum Marketers Association of America in a March 16 letter to the committee.

Bob Dinneen, president and CEO of the RFA, refuted PMAA statements that ethanol was hurting from the decreased price of gasoline. While noting that “it is true that wholesale ethanol prices traded near parity with—or even above—gasoline prices intermittently in November, December, and January,” the RFA writes that PMAA “curiously ignores the fact that ethanol prices have returned to their normal relationship with gasoline prices.” Dinneen goes on to explain that ethanol prices “have been below gasoline prices every day since January 30, 2015” and that “since Jan. 1, 2011, daily ethanol prices have been below gasoline prices 91 percent of the time” resulting in an average 51 cent discount to wholesale gasoline.

Dinneen addresses PMAA’s charge that ethanol “must be priced at least 30 percent lower than conventional gasoline” because of its energy content. The letter notes that “Refiners and blenders value ethanol primarily for its extremely high octane content” and that “ethanol is cleaner and far less expensive than competing octane boosters derived from hydrocarbon refining processes.”

With regard to PMAA’s misleading statement claiming excessive amounts of funding — up to $200,000 — is needed to transform a retail station to sell higher-level ethanol blends, Dinneen points out that the PMAA numbers would be valid only if a station would need a complete overhaul. He goes on to cite the Petroleum Equipment Institute, which found that costs vary station to station and could be done for as little as $1,100 at some stations.

RFA concludes by showing that E85 availability is growing. Dinneen writes that the “overall E85 station count is up and the new stations are much higher volume than those that have disappeared from the landscape.” He points to a Fuels Institute study which “clearly shows the number of E85 stations in the U.S. has increased by over 14 percent per year since 2007.”

The full letter can be found here.