News & Ideas

Big Oil claims on E0 don't add up

ACE Senior Vice President Ron Lamberty says a recent press conference by Big Oil on E0 proves exact opposite of what they were trying to prove.

Yesterday, Big Oil lobbyists held a press conference, lamenting decreasing sales of ethanol-free gas (E0), and trying to convince people that E0 was the only fuel suitable for small engines, and without it, all boats and weed-whackers would grind to a halt. They did offer a solution, and it’s the solution you’d expect: Repeal the Renewable Fuel Standard.

Big Oil knows that small engines are built and warrantied to operate on any blend up to E10, but that doesn’t help their cause, so their presser included a chart showing dwindling E0 sales and availability, a boat lobbyist trying to frighten people about potential misfueling, and the requisite imagery of stranded boaters being swallowed by Moby Dick…  The chart was ironic, because it showed that E0 makes up 5% of gasoline sales, which is about twice as much as every small engine in America would use, if every one of them were fueled with E0, every time. Put that together with 94.5% E10 (which, again, every small engine can also use), and that means the skipper of any given boat only has a 99.5% chance of buying the right fuel for his three-hour tour.

But here’s the thing – oil companies don’t have to ask EPA to make sure there is plenty of E0 around. They can do it themselves. The RFS doesn’t require ethanol in every gallon of gas, it says refiners must use a certain amount of renewable fuel or buy credits from other refiners. That means all Big Oil would have to do to make more ethanol-free fuel available is sell some fuel(s) that have “extra” ethanol. How lucky are they that 80 percent of all cars and light trucks can use E15? If you’re a refiner, and you sell 10 gallons of E15, you earn enough extra credits (RINs) to sell 4 or 5 gallons of gasoline with no ethanol in it. In the real world, there is a 100 billion gallon market for E15, and it would only take two billion gallons – 2% of that market - to create ALL of the extra RINs refiners would need to maintain volume of E0 they say they is “required” (but actually not needed at all).

None of this would be an issue if Big Oil were looking for solutions instead of erecting roadblocks to the RFS. Most retailers that offer E15 tell us it makes up between 15% and 25% of their fuel sales. One of those marketers, Bruce Vollan, provided the simple solution to Big Oil’s dilemma in some comments he made at an EPA hearing last year: “The best way to get over the blend wall is to TRY to get over the blend wall.”

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