Independent petroleum marketers group joins E85 coalition

By Holly Jessen | October 21, 2011

Just more than a week after announcing the formation of the Coalition for E85 the group said Oct. 21 that it had a new member. The Petroleum Marketers Association of America, which represents 8,000 independent petroleum marketers nationwide, will help spread the message that E85 is a true alternative fuel and should receive a 50-cent per gallon tax credit as part of the Alternative Fuel Credit. “If we don’t enable E85 to compete with gasoline, we could see the entire flex-fuel industry disappear,” said Dan Gilligan, PMAA president.  “Our members, automakers, and 9 million American drivers have invested in E85 infrastructure and flex-fuel vehicles.  With E85 so close to self-sustainability, these investments must be protected.”

Currently, compressed natural gas, propane and hydrogen are eligible for the Alternative Fuel Tax credit. The coalition is lobbying that E85, which is defined as an alternative fuel in the Energy Policy Act of 1992, should receive the same tax treatment. E85, unlike E10, is not a gasoline additive.

The group’s success depends on how quickly it can activate a grassroots network of stakeholders, said Jeff Trinca, vice president Van Scoyoc Associates, which has been hired as a lobbyist for the coalition. So far, the coalition’s members include Propel Fuels, Protec, Clean Fuels Development Coalition, Pearson Fuels, AMERigreen, Petro Serve USA, multiple ethanol industry associations, pump and tank companies and individual E85 retailers. The addition of PMAA is something to celebrate. “PMAA brings a motivated group of constituents to the table,” Trinca said. “We are very optimistic that once policymakers understand the difference between ethanol as an additive and E85–an alternative fuel–we can win this issue.  Helping local folks deliver that message is what the E85 Coalition is all about.”

Current supplies of E85 are derived from first-generation ethanol, however, as the industry moves forward it can be produced from non-food sources such as agricultural and household waste, algae and biomass. “Without the E85 system, the federal government’s investment in the development and commercialization of next-generation biofuels may be wasted,” according to the coalition press release.

There are more than 9 million flex-fuel vehicles on the road today. The coalition says that, without the 50 cent Alternative Tax Credit and with the Volumetric Ethanol Excise Tax Credit expiring at the end of 2011, FFV drivers will pay as much as 38 cents more per gallon for E85. The group predicts that small businesses that have invested more than $100 million in E85 infrastructure will have to close their pumps.

PMAA is a federation of 48 state and regional trade associations. A petroleum marketer is defined as wholesale or retail operations that operate in all or some of businesses that own “gasoline stations, convenience stores, heating oil businesses, truck stops, lubricant warehouses, petroleum trucking companies and bulk storage facilities.” PMAA marketers supply fuels to 40,000 independent retail fuel outlets and own a total of 60,000 outlets.

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