OPINION: Policy advances good news for retailers

By Cassie Mullen, director of market development, Renewable Fuels Association | September 30, 2020

Two recent legislative advances and a presidential announcement promise to help not only the ethanol industry, but retailers who want to provide more smart fuel choices for consumers at the pump.

Perhaps most importantly, Rep. Cheri Bustos (D-IL) filed legislation on Sept. 24, the Next Generation Fuels Act, that would establish a low-carbon octane standard for future gasoline. Specifically, this bill would establish a certification test fuel with a research octane number (RON) of 98 (roughly 93-94 AKI), along with a requirement that the source of the octane boost reduces lifecycle greenhouse gas emissions by an average of at least 30 percent compared to a 2018 gasoline baseline. Given ethanol’s low carbon benefits, along with its 113 AKI blending octane number, this legislation offers huge potential for ethanol producers, farmers, retailers, and consumers.

The legislation also includes a restriction on the level of harmful aromatics in gasoline, ensures parity in the regulation of gasoline volatility (Reid vapor pressure), corrects the “R-factor” used in fuel economy testing, provides for an E30 (30% ethanol) fuel waiver, replaces EPA’s flawed MOVES model, and restores meaningful credit toward compliance with fuel economy (CAFE) and emissions standards for the production of flex fuel vehicles (FFVs).

RFA first began advocating for the creation of a national high-octane low carbon fuel standard in late 2018. Even with increased sales of electric vehicles, it is broadly understood and accepted that our light-duty transportation fleet will continue to rely heavily on liquid fuels and internal combustion engines for decades to come, our President and CEO, Geoff Cooper, has noted. We should be pursuing policy solutions that compel improvements in the environmental performance and efficiency of those liquid fuels and internal combustion engines. 

Secondly, just last week, the House passed a comprehensive energy bill that includes provisions aimed at greater transparency in the small refinery exemption process. This will help the ethanol industry and its end users ensure the Renewable Fuel Standard (RFS) is followed, increasing—and, we hope—stabilizing the flow of ethanol and other renewable fuels to fuel stations around the country.

We cannot predict where these two bills will go in the future. What is important to understand in Washington is that any advance is good news, because it gets people talking about our issues, and because often as legislation evolves, important pieces are amended together into a vehicle that moves forward.

Of course, we cannot forget the announcement President Trump made on Twitter Sept. 12: “Subject only to State approval, our important Ethanol Industry will be allowed to use the 10% Pumps for the 15% BLEND.” We thank President Trump for his commitment to removing obstacles to E15 and for again highlighting the importance of the ethanol industry to our nation’s economy and energy security. We look forward to learning more about the president’s plans to expand the nationwide use of E15, and we know it is the subject of a lot of work and discussion in the White House, federal agencies, each state and beyond.

Finally, we are still waiting to see how EPA finally responds to two important court cases, this year’s Tenth Circuit Court decision that promises to severely limit refinery exemptions, and an earlier federal court “remand” of 500 million gallons illegally waived from the 2016 renewable volume obligation, the annual blending requirement of the RFS.

Our goal at RFA matches that of our fuel retailer colleagues: Provide consumers a real option at the pump, a fuel that is not only cleaner and less expensive for them, but that improves energy security and the rural economy. Right now, it seems like the momentum is moving in our direction—especially as we await the final announcement of the USDA’s Higher Blends Infrastructure Incentive Program grant awards.