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WASHINGTON, D.C. -- NACS, the Association for Convenience & Fuel Retailing, provided answers to questions raised by the House Committee on Energy and Commerce on the blend wall and Renewable Fuel Standard (RFS) yesterday. The association's response was sent in a letter to Chairman Fred Upton (R-Mich.) and Ranking Member Henry Waxman (D-Calif.), NACS reported.
"In general, NACS believes the fundamental assumptions that guided Congress’ decision to expand the RFS in 2007 have changed," the letter stated. "At that time, most expected the nation’s fuel demand and reliance on imported energy supplies to continue on an unrelenting upward trajectory. Today, these assumptions are no longer accurate — yet the program enacted in 2007 remains unchanged."
NACS' letter noted it is important that any long-term fuels policy be constructed with inherent flexibility to accommodate changing market conditions, and that the market will likely encounter unintended consequences with difficult and expensive solutions if this is not done.
The letter also provides detailed answers to questions about the blend wall's effect on gasoline retail prices and the impact of E15 -- a blend of 15 percent ethanol and 85 percent gasoline -- including potential risks and benefits. The Renewable Fuel Standard requires refiners to use 13.8 billion gallons of ethanol this year and 15 billion by 2015. Ethanol is typically combined with gasoline in a formula of up to 10 percent, which is referred to as the blend wall.
"NACS appreciates your interest in reviewing the complex issues surrounding this program and encourages you to proceed cautiously, to avoid politically-charged reactionary policies and to consider options that will promote regulatory certainty and enable the market to deliver to the consumer the fuels they demand in the most cost efficient manner possible," John Eichberger, NACS vice president, government relations, concluded in the letter.
NACS' full response is available here on its website.