Oil industry relies on bad assumptions in asking for RFS waiver

By Holly Jessen | June 19, 2013

The American Petroleum Institute has asked the Obama administration use its waiver authority to lower the ethanol blending requirements of the renewable fuel standard. In response, the Renewable Fuels Association  called it flat out wrong and another instance of Big Oil scaring people unnecessarily. “The Renewable Fuel Standard has created jobs, helped the economy and saved consumers money at the pump,” said Bob Dinneen, president and CEO of RFA. “It’s ironic that the industry that brought us MTBE, benzene, tar sands, fracking chemicals, Deepwater Horizon, Exxon Valdez and other environmental disasters is suddenly concerned about ‘consumer safety.’”

API claimed in a press release that the RFS could drive up the cost of gasoline by 30 percent by 2015, citing a study from NERA Economic Consulting. The group also repeated its claims that higher ethanol blends can damage engines, again calling attention to a Coordinating Research Council study. “Congress must repeal the mandate,” said Bob Greco, API’s downstream group director. “But there isn’t much time to get this done. To protect consumers in the near term, EPA has the authority to reduce the mandate now. This would immediately lessen the blend wall problem until Congress can act.” 

However, the RFA pointed out that the CRC-funded study referenced has been criticized by the U.S. DOE and others. E10 is safe and approved for all vehicles while E15 is safe for vehicles 2001 and newer, as approved by the U.S. EPA. “API’s conclusions are inaccurate because their assumptions are flawed,” Dinneen said. “How many times is API going to trot out the same tired study? They have pointed to their self-sponsored NERA study over and over again. But as we have noted in the past, that study ignores the flexibility of the RFS to make it easier for refiners to meet their RFS obligation.”

In addition, it’s misleading to say the RFS will increase gas costs when the opposite is actually true. “Ethanol is less expensive than gasoline today,” Dinneen said. “It lowers prices at the pump. That’s the fact.”

For more information about the CRC study, read a recent blog written by Kristy Moore, RFA’s vice president of technical services.