St. Cloud Times
Written by Christopher Doering
WASHINGTON — The Federal Trade Commission said it would look into charges by Midwest lawmakers that oil companies are pressuring gas stations to limit consumer access to renewable fuels.
Earlier this week, U.S. Sens. Chuck Grassley and Amy Klobuchar released a letter asking the Justice Department and Federal Trade Commission to investigate possible anticompetitive practices by the oil industry, citing several cases where retailers were pressured into not carrying fuel with higher ethanol blends.
While the FTC stopped short of opening up a formal investigation, Chairwoman Edith Ramirez vowed to “make every effort” to find and prosecute actions that violate anticompetitive rules or statutes overseen by the agency
“I can assure you that we will evaluate the information you have provided and the concerns you have expressed under pertinent antitrust standards,” Ramirez said in the letter to Grassley dated Aug. 19. “Protecting American consumers from anticompetitive or fraudulent practices in the energy sector has long been one of our most important responsibilities,” she said.
The Iowa Republican, along with Klobuchar, a Minnesota Democrat, told the regulatory bodies that they have seen reports of some gas stations being required to sell higher-grade gasoline, taking away a pump that could be used to offer renewable fuels. With many stations having only two fuel tanks, the station would have to install costly new infrastructure to sell the higher blends of ethanol.
“I’m pleased to see the Federal Trade Commission is taking steps to investigate whether certain practices by oil companies may be impeding competition,” Klobuchar said in a statement. Grassley said Thursday he looked forward to the FTC’s findings into the allegations.
The ethanol industry, which has long complained about questionable tactics used by oil companies to protect their market share, welcomed the review.
“As an industry there is absolutely no question that they are employing anticompetitive practices. Now that does not necessarily mean they are illegal. That’s for the Justice Department and FTC to find out,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association.
Shaw pointed to efforts used by the oil companies to suppress ethanol use including what he termed a “bogus study” that showed fuel containing 15 percent ethanol would hurt cars, as well as lawsuits that have tried to overturn approval of E15 by the Environmental Protection Agency.
An American Petroleum Institute spokesman said the allegations are “a distraction from the fact that the (Renewable Fuel Standard) is broken. It hasn’t helped clean the air and could be very harmful to consumers.”
Lawmakers in Washington have proposed legislation that would change or repeal the Renewable Fuel Standard, but any effort to make significant change appears difficult.
The Renewable Fuel Standard, an 8-year-old law that requires refiners to buy alternative fuels made from corn, soybeans and other products, calls for 16.55 million gallons of ethanol, most of it made from corn, to be blended into the fuel supply.
The congressional mandate, for now, calls for 18.15 billion gallons in 2014, but the EPA has said levels laid out by lawmakers in 2007 are unrealistic and may need to be reduced.
The ethanol industry estimated that 30 stations offered the E15 blend this spring, including six in Iowa. The Hawkeye State, the largest U.S. maker of ethanol, produced 3.7 billion gallons during 2012 across 41 plants.