Contacts:

Matt Dempsey Matt_Dempsey@epw.senate.gov (202) 224-9797

David Lungren David_Lungren@epw.senate.gov (202) 224-5642

Inhofe: New Bill Restores Consumer Choice at the Pump

Responds to Oklahoma Consumers Demanding Ethanol-Free Gasoline

Link to S. 3736

Washington, D.C. – U.S. Senator Jim Inhofe (R-Okla.), Ranking Member of the Senate Environment and Public Works Committee, last week introduced legislation to restore consumer choice at the gas pump. The bill, S. 3736, allows a state to opt out of the corn ethanol portions of the Renewable Fuels Standard.  Due to ethanol mandates, Oklahoma consumers are being forced to purchase E-10 gasoline, which can cause engine damage and reduced fuel efficiency. The bill will be referred to the EPW Committee; Inhofe will ask Senator Barbara Boxer (D-Calif.), Chair of the EPW Committee, for a hearing on the bill in September.

“As I travel throughout Oklahoma, one of the top concerns from Oklahoma consumers is the lack of availability of ethanol-free gasoline,” Senator Inhofe said. “This bill responds directly to those concerns.  What’s more, it will restore consumer choice at the gas pump.  As for fuel producers, my bill means they can respond to market demands—specifically, when and where consumers prefer clear gas.” 

Full  Inhofe Statement For the Record

With the passage of the 2007 energy bill (EISA), Congress doubled the corn-based ethanol mandate despite mounting questions about ethanol’s compatibility with existing engines, its transportation and infrastructure needs, its economic sustainability, and numerous other issues.  Then, as now, I argued it was just too early to significantly increase the mandate and that the fuels industry and engine manufacturers needed more time to adapt and catch up with the myriad challenges facing corn-based ethanol.   These mandates allow no room for error in a fuels industry already constrained by tight credit, dwindling capacity, costly regulatory mandates, and volatile market conditions. 

The corn ethanol mandate has also led to consumer backlash in certain parts of the country—most notably in my home state of Oklahoma, where one convenience store chain experienced a 30 percent drop in fuel sales once they began selling fuel blended at E-10 levels.  The consumers didn’t want it.  In 2008, the New York Times reported this growing consumer discontent from Oklahoma City:

“Why Do You Put Alcohol in Your Tank?” demands a large sign outside one gas station here, which reassures drivers that it sells only “100% Gas. No Corn in Our Gas,” advertises another station nearby. Along the highways of this sprawling prairie city, and in other pockets of the country, a mutiny is growing against energy policies that heavily support and subsidize the blending of ethyl alcohol, or ethanol, into gasoline. Many consumers complain that ethanol, which constitutes as much as 10 percent of the fuel they buy in most states, hurts gas mileage and chokes the engines of their boats and motorcycles.” 

Despite this consumer backlash, corn advocates today are pushing Washington to impose even greater ethanol mandates.  The most pressing issue facing corn ethanol is the so-called “blend wall”.  EISA mandated 15 billion gallons of corn-based ethanol by 2015.   But, here’s the problem: federal regulations require that a gallon of gasoline should contain no more than 10 percent ethanol.  So there will soon be more corn ethanol production than the amount of ethanol allowed in gasoline.

So what is the solution? Corn ethanol advocates have the wrong approach. Rather than rethink EISA’s corn mandates, they are lobbying for higher, mid-level ethanol blends in gasoline – higher than E10. Sounds like a simple solution, except its consequences would be dire, with potential damage to agriculture, the environment, and engine equipment manufacturers.

Many on-road and non-road engines, vehicles, and equipment are not specifically designed to run on ethanol blends of E10, let alone blends as high as E15.  The available evidence indicates that lawnmowers, chainsaws, snowmobiles, recreational boats, motorcycles, and non-flex-fuel cars and trucks produce higher evaporative and engine exhaust emissions using mid-level ethanol blends.  Also, these blends are more corrosive on certain metals and plastics used in many fuel systems, and cause many gasoline-powered engines to run hotter and at higher RPM levels.  In turn, this results in adverse impacts on starting, durability, operation, performance, and operator safety, due to the degradation of critical components and safety devices.

The American Lung Association has noted that degradation of catalyst efficiency, caused by increasing the ethanol content in gasoline, “can have a major impact on emissions.”  These higher blends of ethanol can also cause NOx emissions to increase up to 25%.  In short, rashly ramping up ethanol use will likely degrade air quality.

On top of environmental concerns, many consumers complain about decreased fuel efficiency.  Corn Ethanol contains 67% of the BTU content of gasoline.  According to EPA, vehicles “operating on E85 usually experience a 20-30% drop in miles per gallon due to ethanol’s lower energy content.”   These results were reinforced by a Consumer Reports study that found E85 resulted in a 27% drop in fuel efficiency. 

In my home state of Oklahoma, ethanol’s blendwall has eliminated consumer choice.  Where consumers could once choose to purchase clear gas, the blendwall is now forcing motorists to buy E10.  The fuel blenders and gas station owners have no option but to sell ethanol- blended gasoline despite strong consumer demand for clear gas.

Today I am introducing a simple three-page bill that responds to the increasing call for more consumer choice to purchase ethanol-free gasoline.  Simply put, my bill allows a State to opt out of the corn ethanol portions of the renewable fuel standard.  To do so, a State must pass a bill, signed by the governor, stating its election to exercise this option.  The opt-out would be recognized by the Administrator of the EPA, who would then reduce the amount of the national corn ethanol mandate by the percentage amount approved by the State in question.  The bill also provides for the generation of credits to hold harmless refiners that would produce clear gasoline sold in an opt-out State. 

This legislation would allow a State to opt-out of only the corn ethanol mandate.  It would not affect other portions of the renewable fuel standard, such as the cellulosic or advanced biofuels volumetric requirements. 

I believe Congress blundered in pushing too much corn ethanol too fast.  This bill will merely allow for fuel producers to respond to market demands—specifically, when and where consumers prefer clear gas.  Right now consumers don’t have the choice.  My bill will help make sure that they do.

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