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Oil Industry Pushes for Reduction in Ethanol Mandate

Consumers would suffer “severe economic harm,” the American Petroleum Institute and the American Fuel and Petrochemical Manufacturers tell the EPA, unless the ethanol requirement for 2014 is reduced.
August 15, 2013

​WASHINGTON – API filed a waiver request for EPA to lower the ethanol mandate to below 10 percent of gasoline demand for 2014. API Downstream Group Director Bob Greco said the move is designed to protect consumers and the U.S. economy.

“The RFS is broken beyond repair, and we are calling on the EPA to use its waiver authority to provide a stop gap measure for this unworkable mandate,” Greco said. “Higher ethanol requirements could lead to a reduction in the domestic fuel supply, increased costs, and severe harm to the U.S. economy.”

The RFS and its requirements could drive up diesel costs by 300% and gasoline costs by 30% by 2015, according to a study by NERA Economic Consulting. Furthermore, API’s petition highlights how higher ethanol blends are not a practical solution to the blend wall, especially given that E15 can damage engines and cause vehicles to break down, according to studies by the Coordinating Research Council (here and here).

“While a waiver for 2014 will provide short-term relief from the RFS mandate, the program is outdated and needs to be repealed once and for all,” Greco said. “Under the current RFS regime, ethanol requirements will continue to increase while gasoline demand continues to decline. That’s why we need a full repeal by Congress.”

API filed the waiver in conjunction with American Fuel & Petrochemical Manufacturers (AFPM).