EPA’s ‘quick kicks’ on ethanol - Trade Only Today

EPA’s ‘quick kicks’ on ethanol

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Seeing no gain of yardage in the ethanol game, the Environmental Protection Agency “quick kicked” by announcing it will further delay, until sometime in 2015, a determination of the quantity of ethanol required to go into the nation’s gas supply for 2014.

Not familiar with football’s “quick kick?” Back in the 1960s, Indiana University was the Big Ten’s football doormat. Seemed like every time the Hoosiers were thrown for a big loss, then-coach Phil Dickens would have the quarterback suddenly quick-kick on third down, hoping to surprise the opponent and recover the kick down field for a big gain. It hardly worked, but did get Indiana out of trouble temporarily.

Similarly, the “quick kick” by the EPA surprises many who anticipated an announcement after the mid-terms that the agency would support an increase in ethanol. Specifically, back in November 2013, the EPA published a notice of rulemaking to set the amount of ethanol required in gasoline for 2014. The EPA now says it will take action on the 2014 standard prior to or in conjunction with a 2015 standards rule.

Obviously, the rulemaking process generated volumes of comments about how ethanol quantities should be set or whether ethanol should even continue to be added to gasoline. Thousands of these comments came from the marine industry. And, while the EPA announcement doesn’t note the damage to the nation’s marine and small engines caused by the current E10 — never mind what will happen with E15 or higher — it’s clear that the marine industry effort to halt the march of ethanol has had an impact.

“There are times we all wonder if our efforts to influence public policy have an impact,” says Larry Innis, Washington lobbyist for the Marine Retailers Association of the Americas, “but they clearly do. In this case, our meetings with the Administration and many lawmakers have been strongly backed by the thousands of emails and phone calls from boat dealers and manufacturers calling for repeal of the ethanol mandate. Everyone who has taken time to write or call should know they’ve had an impact.”

Still, while ethanol levels remain temporarily frozen, we have no real win here. The ethanol war is far from over. For example, Growth Energy, the powerful pro-ethanol lobby, gave backhanded applause to the decision. Growth Energy CEO Tom Buis claims it’s a win because the methodology in the proposed rule went against the purpose of the Renewable Fuel Standard (translation: didn’t guarantee more ethanol.) He said “it’s important that EPA get it right.”

We couldn’t agree more. Getting it right means recognizing that the fuel standard is badly broken and should be scrapped by Congress. And that’s not just the marine industry’s position. Calls for repeal come from a wide variety of groups. How about the National Council of Chain Restaurants? Executive director Rob Green said: “This non-announcement demonstrates once and for all that the EPA, because of statutory and political considerations, cannot fix the failure of the RFS. Members of Congress should take note — the RFS is irrevocably broken.”

Even the National Taxpayers Union contends any increase in ethanol will hurt local businesses like convenience stores and gas stations. Traditional infrastructure can’t handle higher ethanol content. Most storage tanks, pipelines and gas pumps are not equipped to safely handle it. Upgrading gas station equipment could cost $250,000 per station. Recouping costs will be tough because demand for the fuel is so low. Moreover, 99 percent of gas stations are owned by independent businessmen.

Finally, the contention that ethanol lowers gas prices is like saying you can save a drowning man by throwing more water on him. According to the Congressional Budget Office, if the fuel standard continues to rise, the price of E10 alone will rise by up to 26 cents in a couple of years.

So far, the marine industry has been well-engaged in the fight to end the ethanol debacle for good. Unfortunately, it’s no time to rest. I believe the EPA also sees the debacle and would like nothing more than to get out from between a rock and a hard place. It’s important, then, that we continue aggressively voicing objections to any increase in ethanol, while seeking Congressional repeal of the Renewable Fuel Standard.

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