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Blend Wall Crumbles in Retailers’ Eyes

Submitted by on August 5, 2016 – 2:26 pmNo Comment

by Ron Lamberty (Ethanol Producer Magazine)  There is no such thing as a 10 percent blend wall unless petroleum marketers don’t allow a choice. Independent retailers are demonstrating the blend wall can be breached. —  When the U.S. EPA held hearings in November 2013, after its first attempt to (illegally) use Big Oil’s blend wall argument to reduce the conventional biofuel portion of the renewable fuel standard (RFS), Bruce Vollan, a Baltic, South Dakota, fuel marketer, said, “There is no such thing as a 10 percent blend wall unless petroleum marketers don’t give their customers choices above 10 percent.”

Oil companies have done exactly that, using restrictions in supply agreements to prevent station owners from offering blends above 10 percent.  Meanwhile, more than half of Bruce’s customers buy blends above E10, and ethanol is 25 percent of his overall sales, with months as high as 32 percent.

In the first six months Petroserve USA offered E15 and flex fuels in six of their North Dakota C-stores, overall ethanol volume increased to 13.4 percent—and the E15 price wasn’t even on the street sign yet. Bosselman Enterprises offers higher ethanol blends in 13 of its Nebraska locations, and ethanol makes up almost 15 percent of the overall fuel mix at those stations.

Retailers are proving the RFS is achievable, yet Big Oil persists in its “blend wall” rhetoric and the quest to get rid of the RFS. Having worked in the C-store and petroleum marketing business for over 35 years, that’s no surprise.

When lead was being phased out of gasoline 40-plus years ago, the oil industry said it was impossible—and unnecessary. API said “the mass of evidence proves unquestionably that lead isn’t a significant factor in air pollution and represents no public health problem in any way.” It told EPA, if lead was removed from gas, cars would “erode and explode.” It said it would cost tens of billions of dollars to replace infrastructure, put refiners and retailers out of business, waste huge amounts of crude oil, prevent future oil exploration, and, of course, cause huge price increases at the pump.

If that sounds familiar, it’s because the oil industry has used that playbook to attack every regulation put in place over the years to make fuels cleaner.

In the ’90s, the oil industry said EPA’s new underground storage tank regulations would lead to the disappearance of gas stations from small towns across the country. In the early part of this century, it said reducing sulfur in gas would (again) destroy engines and reducing sulfur in diesel fuel essentially would outlaw diesel vehicles.

Each time, EPA stood its ground and the oil industry made the required changes. Air and water quality improved and none of API’s disaster predictions materialized.  READ MORE

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