Senate Hearing On Renewable Fuels Infrastructure

Jul 31: The Senate Energy & Natural Resources Committee, Subcommittee on Energy, Chaired by Byron Dorgan (D-ND), held a hearing to receive testimony on Renewable Fuels Infrastructure. Witnesses testifying at the hearing include Senator Amy Klobuchar (D-MN); the Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy; and representatives of the Governors' Ethanol Coalition; National Petrochemical and Refiners Association; VeraSun Corporation; Chrysler Technology Center; and the National Ethanol Vehicle Coalition.

In a release Senator Dorgan said, “There are 16,000 flexible-fuel vehicles on the road and only 23 E-85 pumps in North Dakota. The Senate has passed legislation to increase the production of renewable fuels by seven fold in the next 15 years. But if we don’t have the infrastructure in place like flexible-fuel vehicles and renewable fuels pumps to absorb all this new ethanol, we could be left with lots of undistributed fuel and have a collapse in the market. Big oil companies are contributing to the problem by placing barriers in their franchise agreements that discourage retail gas stations from offering E-85 fuel, while at the same time seeing record profits. Policy changes must be made to expedite the infrastructure development, which will have a profound impact on the ethanol market in North Dakota and the rest of the country.”

Senator Klobuchar from Minnesota, which ranks first in the nation in E-85 infrastructure with 320 pumps out of 1250 in the nation -- far more than any other state -- said the Federal government can learn from Minnesota’s example. First, she said, "wherever possible, we should encourage ethanol producers to sell directly to gas stations. Outside of Minnesota, ethanol is generally sold under long-term contract to blending terminals, which are part of the oil company-owned pipeline system. The terminals then re-sell the ethanol to gas stations. In essence, the price that consumers pay for ethanol is usually set by ethanol’s biggest competitor, the oil companies." When ethanol producers sell ethanol directly to gas stations without a middleman she said, "drivers get the benefit of a low-cost fuel; the ethanol producers collect the 51 cent-per-gallon federal blender’s credit instead of the oil companies; and America’s energy dollars come right back to our rural communities."

Access the hearing website for links to all testimony and a webcast (click here). Access a release from Senator Dorgan (click here). [*Energy]