September 16, 2015 

Ms. Janet McCabe

Acting Assistant Administrator, Air and Radiation

U.S. Environmental Protection Agency 

Mailcode 6101A

1200 Pennsylvania Avenue, NW 

Washington, DC 20460 

Re: Supplemental Comments to EPA’s Renewable Fuel Standard Program: Standards for 2014, 2015, and 

2016 and Biomass- Based Diesel Volume for 2017, Docket ID No. EPA-HQ-OAR-2015-0111 

The American Petroleum Institute (“API”) and the American Fuel & Petrochemical Manufacturers 

(“AFPM”) submit these supplemental comments in response to the Environmental Protection Agency’s 

proposed rule entitled Renewable Fuel Standard Program: Standards for 2014, 2015, and 2016 and 

Biomass-Based Diesel Volume for 2017. We are submitting these supplemental comments to address 

misrepresentations and factual inaccuracies that some commenters posted to the docket with regards 

to the retail availability of higher-level blends of ethanol, such as E15 and E85.

AFPM and API members are directly regulated as obligated parties under the Renewable Fuel Standard 

(“RFS”). Several members also are renewable fuel producers. API and AFPM support EPA’s exercise of

the general waiver authority to reduce the volumes of renewable fuel for 2014, 2015, and 2016 as a 

necessary step to address the E10 blendwall. As articulated in our original comment submission, E85 

and E15 are not solutions to the E10 blendwall due to compatibility limitations of both the vehicle fleet 

and refueling infrastructure, in addition to a lack of consumer demand. 

In reviewing comments submitted to the docket, we identified several examples where false and 

misleading statements were made regarding obligated party business decisions and commercial 

agreements. We provide the following comments to correct the record on these points. We ask that 

EPA ignore the false claims when finalizing the RFS regulations.

Retail Station Ownership

The assertion that refiners maintain control of the fuels they produce through the distribution system 

until the point of retail sale to the consumer is an often repeated misconception. For example, Abengoa 

Bioenergy, DuPont Industrial Biosciences and POET -DSM Advanced Biofuels stated in joint comments: 

“if they were forced to do so, the Obligated Parties [could] use their control of the gasoline marketing 
 

sector to penetrate the E 10 ‘blendwall.’"

1

In fact, approximately 96% of the gasoline stations in the 

country are independently owned, and it is beyond the control of the obligated parties to require 

investments to make those stations E85 or E15 compliant.2 The decision to invest in new infrastructure 

needed to offer higher level blends is a decision each retailer has to make based on a careful evaluation 

of the market and economic conditions for their business. 

Lack of E85 Demand and Alleged Actions to Discourage E85 Sales

The lack of retail E85 availability is primarily due to a lack of consumer demand. Only about 6% of 

vehicles are compatible with the fuel, and E85 reduces fuel economy and range by about 20-30 

percent.3 Retail station owners must weigh the cost of investing in new infrastructure with expected 

demand, which is particularly challenging for the 58% of retail stations in the U.S. that are owned by 

individuals who own a single store.4 The Society of Independent Gasoline Marketers of America 

(SIGMA) and the National Association of Convenience Stores (NACS) in joint comments noted the lack of 

demand, stating: “the number one trait of any successful retailer is an ability to identify what his or her 

customers want to buy, and then sell that product at a cost that enables the retailer to earn a profit. 

Fuel retailers’ customers do not purchase products because members of SIGMA and NACS sell them; 

members of SIGMA and NACS sell products because their customers purchase them.”5Rather than 

citing the lack of fueling pumps or the refining sector’s alleged recalcitrance as the predominant 

impediment to marketing greater E15 and E85 volumes as some members of the ethanol industry 

contend, it would be more constructive to critically review the structure and overall implementation of 

the RFS2 program for the unintended outcomes in execution that are creating the disincentives for 

ethanol blends and discordant market behavior.

Comments submitted to the docket by Protec Fuel falsely accuse API and some of our members of 

“doing everything possible to discourage their franchisees from carrying E15/E85 and increase the cost 

of installing infrastructure and selling E15/E85.”6 Protec Fuel also claims to “have at least one letter 

from every single major oil company threatening my customers if they proceed forward in selling the 

fuel, and for those who took the risk and are currently selling the fuel, make them take it out.”7 EPA 

should disregard these misleading and false statements when considering public comments and 

developing a Final Rule.

Contrary to Protec’s assertions, franchised retail stations are offering E85. These station owners made

the necessary investments to ensure the station’s infrastructure is compatible with the product and 

meet the local demand for a niche product. While the total number of stations offering E85 is low, 

refiner brands represent a significant percentage of those retail stations offering E85. Our analysis of 

 

1

EPA-HQ-OAR-2015-0111-3272

2

PMAA letter to Chairman Upton and Ranking Member Pallone, House Committee on Energy and Commerce, May 1, 2015 

3

http://www.epa.gov/oms/renewablefuels/420f10010a.pdf 

4

National Association of Convenience Stores, 2015 NACS Retail Fuels Report, p. 28 

5

EPA-HQ-OAR-2015-0111-1937 p. 4

6

EPA-HQ-OAR-2015-0111-1194

7

EPA-HQ-OAR-2015-0111-1043 p. 136
 

the U.S. Department of Energy’s Alternative Fuels Data Center E85 station locator data8shows that 

approximately 28 percent of the 2,639 stations offering E85 nationwide are franchised by major refiner 

brand names, 27 percent are unbranded retailers, another 36 percent are non-refiner brand names, and 

the remaining 9 percent are owned by co-ops and municipalities. The wide distribution of station types 

offering E85, as well as the large fraction of refiner branded stations represented in the above 

referenced data demonstrate that refiners are not a significant obstacle to retail E85 availability. 

Franchise Brand Agreements

Franchise contracts are voluntary agreements between private entities that benefit both parties; the 

franchisee may benefit from supply contracts, advertising and other marketing assistance from the 

franchisor, and the franchisor can differentiate their product offerings from other manufacturers. 

Protec and others have pointed out that franchise agreements may include dispenser and signage 

placement restrictions, and labeling requirements relating to the sale of alternative fuels.

9

 The 

implication is that any such requirements are intended to discourage the sale of alternative fuels. To 

the contrary, these requirements are consistent with the Petroleum Marketing Practices Act and would 

allow the refiner to protect its brand’s trademarks and allow the customer to distinguish branded from 

unbranded products at the dispenser. Clear labeling of products and brands at the dispenser helps to 

ensure the customer purchases the product of their choice that is also appropriate for their vehicle.

E15 Liability

Comments from ethanol advocates including Poet point to branding agreements as a restriction on E15 

availability.10 Gasoline retailer associations PMAA, SIGMA and NACS make clear the primary obstacles to 

offering E15 are a lack of demand, equipment compatibility and potential liability concerns. PMAA 

states: “Consumer and retailer acceptance of E15 will determine the pace of market growth for E15. In 

the near term, E15 will be offered at very few gas stations.”11 SIGMA and NACS detail the groups’ 

concerns over potential liabilities from using incompatible equipment, misfueling, and voiding 

warranties for legal and unapproved use.

12

 We encourage EPA to review comments from PMAA, SIGMA 

and NACS in detail. Refiner brands share many of these concerns.

Conclusion

AFPM and API remain concerned that the proposed volumes for 2016 exceed the E10 blendwall based 

on unsupported estimates that E85 demand will dramatically increase. Should this presumed demand 

increase fail to materialize, the 2016 volume proposal could begin to trigger the negative economic 

consequences of the ethanol blendwall.

13

 EPA should not base any assumptions of E85 or E15 demand 

 

8

U.S. Department of Energy, Energy Efficiency & Renewable Energy, Alternative Fuels Data Center, Fuel Locator, 

http://www.afdc.energy.gov/data_download/

9

API and AFPM are not privy to the specific language detailed in our members’ franchise agreements and this type of company 

specific information is not discussed as a matter of API or AFPM business. 

10 EPA-HQ-OAR-2015-0111-2481 p. 20

11 EPA-HQ-OAR-2015-0111-1197

12 EPA-HQ-OAR-2015-0111-1921

13 NERA Economic Consulting, Economic Impacts Resulting from Implementation of the RFS2 Program (2015) 
 

increases on comments from parties that have provided inaccurate information or unsubstantiated 

assertions. 

EPA correctly points out in the Proposed Rule that members of the renewable fuel industry are free to 

invest in infrastructure to offer higher level blends of ethanol14– it is after all, their product that they are 

trying to force on consumers. Indeed, if members of the ethanol industry truly believed that the only 

market impediment to greater consumption of E15 and E85 were a lack of fueling pumps, they should 

be willing to invest in retail fueling stations so that they could reap the rewards of alleged unmet 

consumer demand for higher ethanol blends. 

Sincerely, 

Robert L. Greco, III

Group Director, Downstream & Industry Operations

American Petroleum Institute

Tim Hogan 

Director, Motor Fuels 

American Fuel & Petrochemical Manufacturers

cc: C. Grundler

 P. Machiele 

 P. Argyropoulos

 D. Korotney

 

14 Federal Register / Vol. 80, No. 111 / Wednesday, June 10, 2015 P. 33114