It’s Time We Break Down the Blend Wall – For Good

By Biofuels Digest columnist Tom Buis
CEO, Growth Energy

There is no greater hurdle to the expansion of the American biofuels industry than the artificial barriers to the market. Through flawed policy and outdated regulation, these barriers serve as a mandate for the American people that 90 percent of our fuel must be gasoline. It should not be lost on anybody that two-thirds of that gasoline is derived from foreign oil.

Make no mistake: that regulation favoring gasoline and oil is the biggest energy mandate on the books, dwarfing both the Renewable Fuel Standard of the 2007 Energy Independence and Security Act and Growth Energy’s Green Jobs Waiver for E15.

And without a market, we will continue to see private capital sidelines instead of being invested into commercializing the great innovations of our industry.

But there is something we can do. We can tear the so-called ‘blend wall’ down for good – by completely reforming ethanol’s access to the motor fuels marketplace.

Last year, Growth Energy proposed the Fueling Freedom Plan. This proposal seeks to reform tax policy in order to encourage the installation of as many as 200,000 Flex Fuel pumps, and see every auto sold in the U.S. be a Flex Fuel vehicles. Only by this standard of market penetration will we be able to see alternative fuels like ethanol take a position in the marketplace so consumers can choose their fuels – instead of having their choice made for them.

Thankfully, we are seeing lawmakers in Congress who agree with reforming the motor fuels marketplace.

In March, Sens. Amy Klobuchar, D-Minn., and Tim Johnson, D-S.D., introduced legislation they called “Securing America’s Future with Energy and Sustainable Technologies,” or SAFEST. Their bill would not only establish a tax-credit for ethanol and biodiesel, but it would use tax incentives to encourage greater production of flex-fuel vehicles and the build-out of infrastructure to deliver ethanol.

Further, it would allow pipeline projects to deliver renewable fuels to qualify for federal loan guarantees, and it amends the Renewable Fuel Standard’s definition of “advanced biofuels” to include ethanol from corn starch – ending a regulation that arbitrarily discriminated against the only commercially-viable alternative we have today to foreign oil.

Sens. Klobuchar and Johnson deserve great credit for their legislation, and Growth Energy was swift to endorse it.

Other legislation includes a bill from Sen. Tom Harkin, D-Iowa, called the Biofuels Market Expansion Act, which was quickly co-sponsored by Sens. Al Franken, D-Minn., Klobuchar and Johnson. Growth Energy was given the opportunity to submit testimony on this legislation to the U.S. Senate Committee on Energy and Natural Resources. We told the Committee that for too long, “…foreign cartels have manipulated oil production to the detriment of both the economy and the security of our nation.

This Committee has before it the opportunity to begin to right the wrongs that have plagued our national energy policy despite the efforts of the last eight Administrations, dating back to President Nixon…. (D)omestically-produced ethanol can do much more today to replace foreign oil in our transportation fuels market. However, if we fail to lift the artificial barriers that block ethanol from entering the market, we will continue a policy that mandates that 90 percent of our motor fuel be gasoline, two-thirds of which is derived from foreign oil.”

Even as critics to biofuels rise up to challenge the industry, there are champions in Congress who are working toward breaking down the artificial barriers that prevent our industry from its natural growth in the market. We support these efforts, and we encourage anyone who supports our industry to reach out and tell their lawmakers in Washington, DC, to support these efforts as well.

More about Growth Energy, here.