American Ethanol Spring 2017 - Page 9

FACT: 97% from a handful of refiners to hundreds or thousands of small fuel retailers would undermine the viability of this successful program. AE: Will changing the current system limit my ability to save money at the pump? Bliley: Most likely. Under the current system, retailers offer biofuel blends, such as E15, at a discount (often 3 to 10 cents per gallon), even when ethanol costs nearly as much as gasoline. These discounts help fuel retailers to price fuel as low as possible to attract customers and sell more convenience items like drinks and candy. A shift in the point of obligation would shake this system to its foundation since refiners do not have this incentive to pass along the savings. AE: Would a shift in the point of obliga- tion limit my choices at the pump? Bliley: If your retailer offers ethanol blends like E15, everything could change. Shifting the point of obli- gation would undercut the retailers who are doing the most to offer you more choices at the pump. The number of stations selling E15 (currently 700 stations in 29 states) would drop significantly. AE: Why would changing the point of obligation be so detrimental to renew- able fuels? Bliley: The RFS has been the law since 2005. The entire fuel and blending system has been built based on the certainty of the RFS. Changing the point of obligation would immediately throw the pro- gram into turmoil. Federal government regulators would have to begin a long, complicated rulemaking process that would, at a minimum, take 18 months but would not likely be resolved for several years. “Changing the point of obligation will impose dra- matically higher costs on consumers or even result in the withdrawal of options from the marketplace.” AE: What would a shift in the point of obligation mean for the future of biofuels? of our gasoline supply now contains ethanol. Bliley: It will halt the expansion of E15 and decrease ethanol sales overall. All the major fuel retailers and convenience store chains, from Sheetz to Minnoco to Kum & Go, oppose a shift in the point of obligation. AE: Are convenience stores the only ones affected by these potential changes? Bliley: No. A shift in the point of obligation would also impact marketers, truck stops, trucking compa- nies, railroads, and even consumer service com- panies like FedEx and UPS, which would suddenly have to deal with significant compliance costs. AE: Are there any alternatives? Bliley: Some have suggested that a change to the point of obligation would be an acceptable sacrifice if the U.S. Environmental Protection Agency (EPA) would lift obscure, outdated regulatory barriers limit- ing sales of E15 in the summer. This would involve a Reid Vapor Pressure (RVP) waiver. However, an RVP waiver is essentially meaningless if the point of obli- gation is changed because retailers would no longer have any incentive to sell higher ethanol blends. AE: What can I do? Bliley: Contact your federal lawmakers and tell them you want choices when it comes to renewable fuels. Also, let them know you don’t want the market un- certainty that would arise from a shift in the point of obligation. For the latest updates on this key issue, visit “Any change in the point of obligation would be detrimental to the biofuel industry and result in higher retail fuel prices.” Lance Klatt executive director SPRING 2017 9