Big problems with E15 biofuel mandate
Some ideas in life seem so right, we call them “no-brainers.” Other ideas sound great in theory, but end up running into practical difficulties which make them hard or even impossible to pull off.
There is currently a proposal pending before the Legislature that is a perfect example of the latter.
It is the idea for an E15 biofuel mandate.
Late last year, the Governor’s Council on Biofuels published a report that called for a change in the state’s E10 ethanol-gasoline standard to E15 as a “near-term policy priority.” Here in corn-growing country, that sounds pretty good, right?
We want local farmers to have expanded markets for their products and most of us support the biofuels industry.
But there is a problem. A big problem.
This idea has taken the form of legislation currently under consideration by the Minnesota Legislature without the means — time and money – to make it happen in any sort of realistic way.
The mandate would take effect by July 1, 2022 (at least in its current Senate version). But most retailers do not have the equipment — storage tanks, piping and dispensers (or “pumps” to most consumers) — which legally and scientifically comply with Environmental Protection Agency regulations for the handling of higher ethanol content fuels.
This problem is not an inconvenience, merely to be overcome. It is a big problem.
The Minnesota Pollution Control Agency regulates retailers’ underground storage tank systems. It estimates that more than 85% of all retailers’ facilities in Minnesota are not compatible with E15.
An even bigger problem?
Responsible estimates indicate it would take 10 years and cost almost $800 million to replace retailers’ systems to handle E15 as the new standard gasoline. (Why 10 years, you may ask? Because there are only so many qualified contractors who dig up and replace fuel systems to go around.)
Yes, it is true that some retailers already handle E15. But for the 85% of us who do not, the twin threats of an impractical deadline and an enormous, unexpected, state-imposed cost (about $590,000 per location) will have one likely real-world outcome: It will force many of us out of business. If that happens, consumers will have to drive long distances to the remaining retailers just to fill up their gas tanks. The lack of competition won’t improve consumer prices and fewer outlets mean that less fuel will be sold overall.
An E15 mandate — if the Legislature is unwise enough to enact it into law — could have the unintended consequence of hurting the very businesses that should be at the forefront of marketing new fuels to the consumer.
Make no mistake about it: We who sell gas to you want to sell biofuels. But to sell more of it requires a genuine policy no-brainer which works for producers, sellers and consumers alike — not a mandate.
— Jay Cattoor is president of Cattoor Oil Company in Marshall. David Hutt is president of Hutt Oil Company of Boyd