US Senators say oil firms may be blocking renewable fuels

US Sens. Charles E. Grassley (R-Iowa) and Amy Klobuchar (D-Minn.) said oil companies may be using anticompetitive practices to block access to renewable fuels, and asked for a federal investigation.

They said the Renewable Fuel Standard, which was created under the 2005 Energy Policy Act and expanded under the 2007 Energy Independence and Security Act, has helped decrease oil imports and improve US energy security while reducing gasoline prices.

“Faced with growing competition from new sources of fuel promoted by the RFS, the oil industry has publicly stated their goal of repealing [it],” the senators said in their Aug. 21 letter to US Atty. Gen. Eric H. Holder Jr. and US Federal Trade Commission Chairwoman Edith Ramirez.

“At the same time, we have heard reports that oil companies are taking steps to undermine efforts to distribute renewable fuels that could help to meet the RFS requirement,” the lawmakers added.

They said they have heard allegations that “the oil industry” requires retailers sell premium gasoline, “thereby blocking the use of the current retail infrastructure to sell renewable fuels,” adding, “Station owners who wish to sell renewable fuel would bear the cost and logistical burden of having to install additional infrastructure to do so.”

Grassley, who is the Senate Judiciary Committee’s ranking minority member, and Klobuchar said forcing a franchisee to sell premium gasoline as a condition for continuing to receive regular may violate the Sherman Antitrust Act and the 1980 Gasohol Competition Act, which prohibits discrimination or unreasonable limits against the sale of fuels blended with alcohol.

Their allegations followed similar charges the Renewable Fuels Association made on Mar. 19 when it asked the US Departments of Agriculture and Energy, the US Environmental Protection Agency, and the FTC for “a multiagency investigation into the oil industry’s highly discriminatory and unlawful conduct that is impeding the delivery of renewable fuels to the American marketplace.”

A spokesman for the American Petroleum Institute said on Aug. 22: “The allegations are a distraction from the fact that the Renewable Fuels Standard is broken.”

Contact Nick Snow at nicks@pennwell.com.

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