Diverse coalition urges US Senate to oppose ethanol mandates

An unusual coalition of business and labor interests has urged US Senate leaders to oppose legislation mandating ethanol use in gasoline, saying it would hurt consumers. The coalition -- including refiners, labor unions, and highway user groups -- also opposed a plan to mandate use of 5 billion gal/year of renewable fuels by 2012.

By the OGJ Online Staff

WASHINGTON, DC, Dec. 17 -- An unusual coalition of business and labor interests has urged US Senate leaders to oppose legislation mandating ethanol use in gasoline, saying it would hurt consumers.

The coalition -- including refiners, labor unions, and highway user groups -- also urged Majority Leader Tom Daschle (D-SD) to drop his proposal in Senate energy bill S 1766 that would mandate use of renewable fuels, the most commercially available of which is ethanol, from 2 billion gal/year in 2003 to 5 billion gal/year by 2012.

The letter, which also went to Minority Leader Trent Lott (R-Miss.), said the groups oppose "any attempt to add an ill-conceived and problematic ethanol mandate to legislation considered by the Congress."

The coalition said, "As ethanol use is required farther from its traditional Midwest markets, its inability to be transported by pipeline coupled with its specialized [gasoline] feedstock demands will increase gasoline prices across the nation." The groups said a recent study of a proposed ethanol mandate estimated the direct increased cost to consumers at $6.7 billion.

Under Daschle's plan, use of the oxygenate methyl tertiary butyl ether would be banned after 4 years, but states would be allowed to waive the oxygen content from clean fuel programs. The bill would also offer grants to MTBE producers who convert production to other fuel uses (OGJ Online, Dec. 5, 2001).

An energy bill passed by the Republican-led House of Representatives does not include an ethanol mandate. However, fuel ethanol has bipartisan support from politically influential farm states. And President George W. Bush recently supported legislation that encourages the use of ethanol, although he has not specifically endorsed Daschle's provision.

The White House, in its energy blueprint released last May, endorsed a continuation of a partial excise tax exemption for ethanol-blended gasoline. The White House maintained that expanding ethanol use helps clean the air, reduces dependence on foreign oil, and gives farmers added income by boosting demand for corn.

Lobbyists expect to see Congress pass comprehensive energy policy legislation sometime next year.

The coalition members are: the American Highway Users Alliance; National Association of Convenience Stores; National Petrochemical & Refiners Association; Small Business Survival Committee; International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers, AFL-CIO; and the Oxygenated Fuels Association.

More in LPG Markets