Bill Introduced to Provide Liability Protection for Renewable Fuels

March 30, 2012 12:49 AM

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Legislation tries to deal with several hurdles

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

A bipartisan group of lawmakers in both chambers on Thursday unveiled legislation that would provide liability protection to retailers and others involved in the design, manufacture, and sale of renewable fuels -- including, but not limited to, E15, a blend of 15 percent ethanol and 85 percent gasoline.

The bills, led by Sen. John Hoeven (R-N.D.) and Rep. John Shimkus (R-Ill.) have a lot of support from proponents of renewable fuels, who say that liability protection could spur the development of even higher-blend renewable fuels and provide a big boost to the ethanol industry.

Concerns about potential problems with new fuels like E15 — and the possibility that motorists might put them in vehicles not approved for the product – have kept automakers, retailers, and manufacturers from totally accepting the new fuel.


The EPA approved E15 for use in model-year 2001 vehicles and newer, but other matters must be dealt with before it can be used.


Other lawmakers sponsoring the legislation, the Domestic Fuels Act of 2012, include Sens. Amy Klobuchar (D-Minn.), Roy Blunt (R-Mo.), and Mike Crapo (R-Idaho).


Currently red tape, such as cost of entry for retailers, inconsistent standards, and other regulatory factors limit the amount of renewable fuels that can be sold through existing motor fuel retail outlets. The Domestic Fuels Act would help make it easier to market all fuels and give consumers more choice at the pump. The bill would do this by:



  • Streamlining the process so that all fuels, both traditional and renewable, can be stored and dispensed with common equipment. The bill requires the EPA to develop streamlined criteria so that underground tanks can be used to dispense gasoline, diesel, ethanol or some combination of fuels, rather than requiring the use of separate tanks.

  • Providing liability protection for retailers that meet the streamlined EPA standards, so that they can sell multiple types of fuel with less red tape, providing consumers with more choice and lower fuel prices.

  • Establishing a new pathway for retailers to ensure that their equipment is safe and legally recognized as compatible to sell new fuels, thereby reducing the cost of entry for many retailers.


Hoeven said his bill "will help service stations across this country market more ethanol and biodiesel but also enable them to market petroleum products more easily as well as combinations of fuels."


"It’s a market-based approach that will help traditional and renewable fuels. Those are the kinds of solutions we need that work for everybody — not higher taxes," Hoeven said. "This is truly doing all-of-the-above, not saying all-of-the-above and blocking energy development."


"This would cut through red tape and help provide the clear standards needed to increase competition and bring homegrown energy to consumers," said Klobuchar. "Now is the time to increase domestic production of energy, focus on the homegrown energy solutions that will reduce our dependence on foreign oil, and give consumers choice at the pump."


"We need to make all fuels available to American consumers and businesses, and we need to do so by using tested market-based measures that increase competition and remove bureaucratic obstacles to producing and marketing both domestic and traditional fuels," Hoeven said. "This is really about giving customers more choice and better prices at the pump by empowering retailers to market multiple fuels using the same equipment. That’s good for the customer, good for business and good for the nation."


"I’m pleased to work on this bipartisan bill with my colleagues in order to cut red tape and remove legal barriers standing in the way of new fuels as we work towards greater energy independence," said Blunt. "This bill provides a new pathway for job creators to use existing equipment in order to safely store and dispense newer fuels while reducing costs for retailers. As Americans suffer from skyrocketing gas prices, making use of alternatives, in addition to all available domestic fuels, will allow us to provide more consumer choice, lower prices at the pump, and reduce our dependence on unstable foreign sources of energy."


"This legislation ensures that safeguards remain in place for consumers while eliminating unnecessary regulations that could drive up costs at the pump," Crapo said. "The process will allow retailers to sell new fuels without incurring unreasonable costs or liability, while granting consumers confidence when choosing higher ethanol blends."


The measure is supported by a range of industries and associations, including the Renewable Fuels Association, Growth Energy, American Petroleum Institute, Tesoro Corp., American Fuel and Petrochemical Manufacturers, Petroleum Marketers Association of America, Exxon-Mobile, Association of Convenience Stores, Society of Independent Gasoline Marketers of America, National Association of Truck Stop Operators and Outdoor Power Equipment Institute.


"This legislation is the culmination of an unprecedented and multi-year collaboration among all parties in the transportation fuels universe – marketers and retailers, auto engine manufacturers, non-road engine manufacturers, renewable fuel advocates and manufacturers of transportation fuels," said Gregory Goff, President and CEO of Tesoro Corp., leading oil refining company.


"This bill is a thoughtful approach that will help speed this country’s transition to E15, higher ethanol blends, and other advanced biofuels," said Bob Dinneen, president and CEO of the Renewable Fuels Association. "The bill would avoid unnecessary infrastructure investments by providing gasoline marketers with a commonsense certification pathway for existing equipment that assures safety while accelerating consumer access to these new fuels. The Domestic Fuels Act could help deliver price relief at the gas pump for consumers while increasingly liberating this country from its unhealthy, unsafe dependence upon foreign oil."


In a letter to Hoeven on Thursday, Gregory Goff, president and CEO of oil refiner Tesoro, lauded the lawmaker for bringing together so many disparate players for one bill. "These are sectors that have taken different paths toward this moment and this legislation," Goff wrote to Hoeven. "You are to be commended for shepherding such a diverse group."


Goff said that although Tesoro continues to have reservations about the renewable-fuels standard in the Clean Air Act, the refining company does recognize that federal requirements for renewable fuels remain in place and therefore welcomes the protection from "unwarranted litigation for any consequences caused by these required higher levels of renewable-fuel blending."


EPA recently approved required health effects and emissions testing for E15, bringing the fuel one step closer to commercial availability for those drivers, but before retailers can begin selling the fuel for 2001 and newer vehicles, additional requirements must be met, including EPA approval of a misfueling mitigation plan for retailers. State regulations also need to be amended to allow E15 to be sold and retail infrastructure must be approved to store and dispense the fuel.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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