WASHINGTON -- U.S. Senators Barack Obama (D-Ill.) and Charles Grassley (R-Iowa) said that they have asked the Government Accountability Office (GAO) to investigate whether major oil companies are knowingly restricting consumer access to alternative fuels like ethanol and biodiesel as a result of company policies.
I believe that it is crucial for our national security and economic security that the United States lessen its dependence on foreign oil, said Obama. And if big oil companies are standing in the way of consumers who want to fill their vehicles [image-nocss] with cleaner alternative fuels made here in the United States, then I believe the American people deserve to know why.
Citing an internal oil company memorandum obtained by his office, Obama said gas station franchise owners are prohibited from selling nonbrand-name renewable fuels like E-85 (85% ethanol and 15% gasoline) and B20 (blended diesel that includes 20% biodiesel made from soybeans and can be used in conventional diesel engines) from fuel islands or underneath canopies bearing the oil company's name or logo. The memo also said that any alternative location of fuel pumps dispensing alternative fuels must be approved.
Obama and Grassley are requesting that GAO, the watchdog arm of Congress, analyze the current state of refueling stations that dispense alternative fuels like E-85 and B20 biodiesel. The investigation would examine whether any oil companies have policies or practices that directly or indirectly prohibit or discourage the construction, installation or operation of E-85 and B20 fueling pumps.
Since taking office, Obama has been an advocate for increasing access to and production of alternative fuels like ethanol, he said. Legislation Obama introduced last year to provide a 30% tax credit up to $30,000 for the installation of E85 fuel pumps was included in the federal energy bill and signed into law by President Bush. This proposal will encourage increased ethanol use and help reduce our nation's dependence on foreign oil. Obama is also a supporter of biodiesel, he said. Last November, he introduced legislation calling for a Renewable Diesel Standard that would require two billion gallons of diesel alternatives by 2015.
Meanwhile, a Marathon station under construction in Urbana, Ill., will have an E-85 dispenser, reported The News-Gazette.
Randy Meyer, president of Meyer Oil, Teutopolis, Ill., told the newspaper that he plans to install an E-85 tank and pump at the station, which is set to open in about two to three months. He already offers E-85 at a station in Danville, Ill., that opened last summer.
The decision came after he received state grants to help cover his costs of installing the tanks and dispensers, he said.
The Illinois Department of Commerce & Economic Opportunity, through the Illinois Clean Energy Community Foundation Grant, has $250,000 (out of an original $500,000) left to help Illinois stations pay for installation of new tanks and new pumps for dispensing E-85, said the report.
There are currently more than 600 E-85 stations across the United States, up from 250 at this time last year, according to the report, citing the National Ethanol Vehicle Coalition. The group is anticipating an additional 2,000 stations in 2006.
After the federal energy bill became effective January 1, retailers were allowed to claim tax credits which would allow them to deduct up to 30% of their costs of installing or retrofitting stations for alternative fuels, including E-85, the coalition's Michelle Kautz told the paper. "Last year, most [of the E85 pumps] were concentrated in the Midwest. Now with the new tax credit that will broaden the availability across the nation," she said.
A few months ago, when gasoline prices were at record levels, E-85 was about 30 to 70 cents per gallon cheaper than regular gasoline in Illinois, Mark Lambert, spokesperson for the Illinois Corn Growers Association, told the paper. At that time, there was a glut of ethanol in the market.
"Ethanol wasn't being absorbed fast enough," he said.
Since then, however, E-85 has risen in price because the cost of ethanol has risen. One reason is supply and demand. "There's huge demand for ethanol right now, even though we're breaking production records every month. They can't make ethanol fast enough," Lambert said.
More stations are buying E-85, more automobiles are capable of running on E-85, the automotive industry has been promoting the FFVs more and more people are buying these cars, Kautz and Lambert said. "We are continuing to pump out ethanol and that's the good news," said Lambert. The price will moderate at some point, but whether that happens in the next few months or in a year remains to be seen, he said.
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