US House block of E-15 ethanol unlikely to gain traction - panel

21 February 2011 21:30  [Source: ICIS news]

PHOENIX, Arizona (ICIS)--A move by the US House of Representatives to block federal authorisation for a 15% ethanol fuel blend (E-15) is not likely to gain traction in the Senate, but the action points to the challenges to be faced this year by the ethanol industry, a panel of Washington “insiders” said on Monday.

Speaking at the National Ethanol Conference, the “Washington Insiders Roundtable” included representatives of the American Petroleum Institute (API), the Alliance of Automobile Manufacturers, the National Corn Growers Association and the Renewable Fuels Association (RFA).

The panellists said the 235-189 vote by the House of Representatives on 19 February to block the E-15 ethanol fuel blend was not likely to go far in the Senate, but the substantial vote got the attention of Washington and points to potential issues down the road.

Representative John Sullivan (Republican-Oklahoma) attached an amendment to the fiscal year 2011 spending bill that would deny any funds to the Environmental Protection Agency (EPA) to implement its authorisation for distribution and sale of E-15 blends for use in automobiles manufactured in 2001 and later.

In decisions announced in October last year and in January this year, the agency approved the use of E-15 in cars and light trucks manufactured in 2001 and later, but the approval did not apply to older passenger vehicles, off-road and construction equipment, marine engines and gasoline-powered maintenance equipment such as chain saws.

Sullivan said that the EPA’s authorisation for limited E-15 fuel blends use was made without proper safety and compatibility testing.

RFA president Bob Dinneen maintained that ample testing has shown no harm to vehicles as a result of E-15 blends. However, the Alliance of Automobile Manufacturers vice president of government affairs Shane Karr said the amount of testing was only a fraction of what the automobile industry usually performs when there is a proposed fuel change.

Karr said the automobile industry was still uncomfortable with what he termed a “piecemeal, retroactive approach” to the fuel blend issue. “We need to know in advance what fuel we are building our cars for,” he said.

In the 19 February vote, the House voted to cut $61bn (€45bn) from the federal budget, signalling a potential spending showdown with the US Senate and the president that could lead to a federal government shutdown. Without a continuing resolution, government funding would run out after 4 March.

The atmosphere in the House of Representatives is one of “cut, cut, cut”, said Mark Rokala, vice president, Cornerstone Government Affairs, a consultancy and lobbying firm. As such, he said it was unlikely that Congress would pass any mandates in the foreseeable future.

Marty Dubin, executive vice of the American Petroleum Institute, said he did not think it likely that Congress would pass an energy bill this year or next, but added public poling indicated two out of three people did not favour additional taxes on the energy industry.

The 16th annual National Ethanol Conference runs through Tuesday.

($1 = €0.73)

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By: Brian Ford
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