Fuel Retailers Will 'Sell What Customers Want to Buy'

Petrowski testifies before House subcommittee on industry's willingness to offer altfuels

Joe Petrowski

WASHINGTON -- "Our sole objective is to sell what our customers want to buy and, as new fuels enter the market, we want to be able to sell them," Joseph Petrowski, CEO of The Cumberland Gulf Group, Framingham, Mass., told the U.S. House Energy & Commerce Committee's Subcommittee on Energy & Power, testifying Tuesday on behalf of both the Society of Independent Gasoline Marketers of American (SIGMA) and the National Association of Convenience Stores (NACS).

"America’s love affair with the automobile is not going away. Neither is the need for transportation fuels that underpin the economy and create jobs," he said. "Our industry is committed to facilitating this contribution to the American economy. ... We devote vast resources to offering and adapting to new technologies and market opportunities. My company is constantly striving to identify the best new products and services we can bring to our stores and facilities. Consequently, we are not beholden to any specific product."

In his opening statement at the hearing, "The American Energy Initiative: A Focus on Alternative Fuels & Vehicles, Both the Challenges & the Opportunities," vice chairman John Sullivan (R-Okla.) said, "Gasoline and diesel fuel currently dominate the transportation sector, and that is not likely to change any time soon. For that reason, we need to take steps to ensure plentiful and affordable supplies of petroleum and the fuels that are made from it. That means expanding domestic oil production, approving the Keystone XL pipeline to allow more Canadian oil to come into the country, and reviewing the red tape that raises the cost of refining crude into gasoline and diesel fuel. That is why I strongly supported measures like the Domestic Energy & Jobs Act, and why I will continue to fight for a commonsense, pro-consumer, pro-jobs and pro-energy policy.

"But in addition, we need to look at options other than petroleum derived fuels, and indeed we are doing so. We are well into implementation of the Renewable Fuel Standard created in the 2005 energy bill and expanded in the 2007 bill. The RFS has achieved some successes such as increased ethanol production; however, some also see shortcomings with the RFS that may need to be addressed.

"Even beyond ethanol and other biofuels, there are many other alternative fuels and vehicles, including natural gas, electricity, coal-to-liquids, methanol, and flex-fuel vehicles. Each offers its own unique mix of advantages as well as disadvantages, and all offer the benefits of diversification."

Petrowski testified, "If Congress is serious about new and alternative fuels energy entering the marketplace, it must take action to lower the cost of entry and remove the threat of unreasonable liability. Only then will more retailers be willing to take a risk and offer a new renewable fuel. By lowering the barriers to entry, Congress will give the market an opportunity to express its will and allow retailers to offer consumers more choice. This is what retailers want--consumer choice. If consumers reject the new fuel, the retailer can reverse the decision without sacrificing a significant investment, but new fuels will be given a better opportunity to successfully penetrate the market."

He discussed the "blend wall," the point at which the market cannot absorb any additional renewable fuels. "Congress can do something immediately to mitigate other obstacles preventing new fuels from entering the market. H.R. 4345, the Domestic Fuels Protection Act of 2012--currently before the Subcommittee on Environment & the Economy--addresses three of these obstacles: infrastructure compatibility, liability for consumer misuse of fuels and retroactive liability of the rules governing a fuel change in the future."

He noted that "H.R. 4345 is not an E15 bill--it applies to any new fuel formulations or additives approved and registered by EPA. E15 is often used as the primary example to demonstrate how this legislation would affect the market because it is a fuel with which we are now very familiar; however, H.R. 4345 is designed to facilitate the introduction of all innovative new fuels."

He concluded, "The nation’s fuel retailers are ready to assist Congress in its consideration of policies that will promote a stable and efficient market for transportation fuels."

Click here to read Petrowski's full prepared testimony. And click here to read other testimony, including that of Jack Gerard, president and CEO of the American Petroleum Institute (API); Robert Dinneen president and CEO of the Renewable Fuels Association; and others.