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Supreme Court Declines to Rule On E-15

posted on June 28, 2013

Continued recovery in the housing sector and an improving labor market pushed consumer sentiment this month to a five-year high.

According to the Commerce Department, sales of new homes rose in May at their fastest pace in five years. The median price of a new home sold last month was $263,900, up 3.3 percent from a year ago.

U.S. employers added a respectable 175,000 jobs last month while the national unemployment rate has fallen six-tenths of one percent in the past year.

And the Conference Board, a private research group,   reports its Consumer Confidence Index soared to 81.4 in June in its best showing since January of 2008.

Businesses monitor consumer confidence closely because consumer spending accounts for nearly 70 percent of U.S. economic activity. 

But confidence also plays a pivotal role in the product development phase of business.  And in a case pitting renewable fuels producers against Big Oil, the Supreme Court paved the way this week for increased blends of ethanol.

Supreme Court Declines to Rule On E-15

The Supreme Court refused to consider a challenge by the American Petroleum Institute that would have blocked sales of E-15, a blend of gasoline that is 15 percent ethanol.   

Bob Greco, American Petroleum Institute:  “We were disappointed by the decision.  I mean we’re in a position where we can’t even argue the merits of this premature decision.  So we are accessing our legal options right now and determining what our next steps will be.”

 By rejecting the case, the High Court essentially upheld a lower court ruling allowing the increased blend.  This week’s action was the just the latest fight in a long-running battle over the Renewable Fuel Standard, or RFS. 

Monte Shaw, Iowa Renewable Fuels Association:  “This is a real clear battle for the barrel.  Okay, the oil companies want you to buy petroleum.  We want consumers to have the choice of higher blends.  No one is requiring you to buy E-15.  No one is requiring you to buy even higher blends like E-85.  But we think it’s good for consumers to have those options.”

 Approved by Congress in 2005, the RFS requires that the amount of ethanol blended with gasoline increase each year.  Its goal is to reduce the nation’s reliance on fossil fuels and decrease greenhouse gas emissions.  

Supporters of the Renewable Fuel Standard claim the law has created more than 400,000 jobs, and has played an important role in revitalizing rural communities. Proponents also say blended fuels have helped to reduce the U.S. dependence on foreign oil by more than 30 percent and have benefitted the environment by reducing carbon emissions.

Monte Shaw, Iowa Renewable Fuels Association:  “Big oil cannot compete with ethanol blends on either price or performance.  You know they’re not scared that you’re going to put E-15 in your car and your car is not going to work.  They’re scared to death that you will find out that you can put E-15 in your car and it will work just fine because they cannot compete on price and performance.”

The Renewable Fuel Standard sets a 16.5 billion-gallon production requirement for ethanol and other fuel alternatives this year, up more than a billion gallons from last year.  By 2022, the law requires an increase to 36 billion gallons, more than double this year’s production.  Opponents, however, say the RFS mandate puts politics ahead of science.

Bob Greco, American Petroleum Institute:  “Well because EPA made this decision prematurely.  We’ve had additional research come out that shows the millions of vehicles in this country that are on the road today are at risk to engine damage and fuel pump damage if they use E-15.”

Ethanol supporters say that E-15 is cheaper than conventional gasoline and offers similar gas mileage as E-10.  And after years of delays, the Supreme Court’s decision this week will allow consumers to make their own decisions at the pump.   



Tags: American Petroleum Institute API Bob Greco E-15 ethanol Iowa Renewable Fuels Association Monte Shaw renewable fuels Supreme Court