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ALEXANDRIA, Va. -- As more drivers rely on convenience stores to gas up, the industry as a whole would like the chance to sell more renewable fuels, but it needs Congress' help to make it more affordable and less risky.
Testifying before the House Energy and Commerce Committee's Subcommittee on Energy Power, NACS Chairman Jeff Miller noted that 80 percent of the country's motor fuels are sold at convenience stores. "We support the use of renewable fuels and are working hard to expand their use with the motoring public," said Miller, who is president of Norfolk, Va.-based Miller Oil Co. But before retailers add new fuels such as E15 they have to carefully examine concerns related to potential costs, liability concerns and customer demand.
"Choosing to sell a new fuel is very different than choosing to sell a new candy bar. As new fuels come onto the market, we want to have a reasonable expectation that we will be able to generate a return on our investment and have the option to sell them while being in compliance with all laws and regulations. But to do this, we need your assistance," he explained.
A major concern when choosing to sell a new fuel is the cost of compatibility, Miller said, adding that all related fueling equipment must be listed by Underwriters Laboratories (UL) as compatible. He explained that because UL will not re-certify any existing equipment, even equipment that is technically compatible with the new fuel, a retailer's only legal option is to replace dispensers, at a cost of roughly $20,000 per unit. In addition, underground storage equipment must also be replaced if it is not UL certified.
"Once I crack open concrete my costs could easily exceed $100,000 per location, which now gets us up to about $200,000 in pump and tank costs. So offering E15 could become very expensive," Miller said.
Furthermore, retailers need to be concerned with issues related to misfueling. Under the Environmental Protection Agency's partial waiver, only certain engines are authorized to fuel with E15. Vehicles manufactured before 2001 and all off-road use engines are not included in this partial waiver and retailers could be exposed to claims related to damage from misfueling, he explained to Congress.
"So how do I prevent the consumer from buying the wrong fuel? If I don't, I could be fined or sued under the Clean Air Act. Or, if using the wrong fuel causes engine problems, I could be sued by the consumer or word could spread that my fuel damages engines, hurting my reputation,” Miller testified.
Another liability concern relates to the potential that E15 could later be called a defective product.
Retailers also are worried that there may not be a demand for E15 since it is the first fuel transition in which no one is required to purchase the fuel. "It is also important to remember that E15 is approved by EPA for only certain vehicles and that the auto manufacturers do not support this decision. So, it is almost impossible for me to evaluate consumer demand," he added.
To help ease the cost and potential risks of embracing new fuels in the convenience store marketplace, Miller told Congress that its members should authorize an alternative method for certifying retail equipment, ensure that those retailers who comply with EPA's labeling regulations can't be held liable for self-service customers using the wrong fuel, provide regulatory and legal certainty that compliance with current laws and regulations will protect retailers from retroactive liability should law and regulations change, and support the development of vehicle and infrastructure-compatible fuels (drop-in fuels).
"If Congress takes these actions to lower the cost of entry and to remove the threat of unreasonable liability, more retailers may be willing to offer a new renewable fuel. The market will then be able to determine the fate of new fuels," Miller concluded.