The Iowa Renewable Fuels Association last week joined Linn Co-op Oil Company in Marion, Iowa to highlight the need for fueling freedom during the busy Independence Day driving season. Linn Co-op has been approved by the federal Environmental Protection Agency to offer E15, but petroleum refiners servicing the Cedar Rapids area refuse to make the proper gasoline for blending with 15% ethanol available. The power of Big Oil's petroleum distribution monopoly to restrict retailer and consumer options was the focus of last week's joint press conference.
"On the cusp of Independence Day, Linn Co-op should be America's first E15 retailer today, pumping E15 into 2001 and newer vehicles," said Jim Becthold, service manager of Linn Co-op Oil Company. "I have complied with all state regulations. I have my letter of approval for E15 from the EPA. But my customers and I remain dependent on Big Oil because refiners won't put the gasoline blendstock for E15 into the pipelines for our area. I am frustrated that my customers are being denied fueling freedom as we celebrate our nation's independence from foreign power."
Independence Day driving season highlights need for lower cost, American fuels
Due to a quirk in federal fuel regulations, during the summer (June 1 through September 15) the gasoline blendstock needed to blend E15 is different from the gasoline blendstock for E10. Refiners control what products go into pipelines that feed the fuel terminal for the Cedar Rapids area. The refiners have refused to provide E15 blendstock anywhere in Iowa. Based on market conditions, E15 would save Iowa consumers 5 to 10 cents per gallon.
"Iowa needs fueling independence," said IRFA executive director Monte Shaw. "One of the least understood ways Big Oil maintains its death grip on America's fueling options is through control of the products entering the pipeline system – what we call the petroleum distribution monopoly. So today, retailers who want to sell E15 are denied. Iowans who want to purchase E15 are forced to buy higher priced products with a
higher petroleum content."
To bust the petroleum distribution monopoly by going around the pipelines is costly and logistically challenging. America is being denied fueling freedom and there's no better time to demand fuel choice and free markets than during the July 4th holiday, he adds.
Pipelines provide the most cost-effective method of transporting liquid fuels
Tax subsidies specific to Big Oil date back to 1913. Big Oil used the century of subsidies and federal loan guarantees to create a nationwide pipeline distribution network. Pipelines provide the most cost-effective mode of transporting liquid fuels. Today, even as many of the pipelines are owned by different entities, Big Oil can control the products offered at a corner gas station in Iowa by controlling what products go into the pipeline system. "To transport products like E15 by truck instead of pipelines is costly and can result in the ethanol price savings being eaten up by the added transportation costs," notes Shaw.
Iowa is the leader in renewable fuels production. Iowa has 41 ethanol refineries capable of producing nearly 3.7 billion gallons annually. In addition, Iowa has 13 biodiesel facilities with the capacity to produce 320 million gallons annually.
The Iowa Renewable Fuels Association was formed in 2002 to represent the state's liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development. For more information, visit the Iowa Renewable Fuels Association website at www.IowaRFA.org.