AAA Wants Ethanol Mandates Eased as Gas Prices Drop
WASHINGTON, D.C. -- The American Automobile Association (AAA) yesterday asked the Environmental Protection Agency (EPA) to reduce the amount of ethanol that needs to be blended into gasoline in 2014 under the Renewable Fuel Standard (RFS).
The RFS requires refiners to use 13.8 billion gallons of ethanol this year. Ethanol is typically combined with gasoline in a formula of up to 10 percent, which is referred to as the blend wall.
"The EPA should lower ethanol targets immediately as part of the proposed 2014 RFS rule to support consumers and promote alternative fuels," AAA President Robert Darblenet stated in a press release. He added that left unchanged, gas prices would rise and potentially dangerous ethanol blends could be placed into vehicles.
AAA has shown specific concerns about E15, a blend of 15 percent ethanol and 85 percent gasoline, because of reports it can damage engines.
Opposing groups have stated that concerns regarding ethanol are considerably overblown, however. "If Big Oil -- and AAA -- would stop obstructing consumer choice, American drivers could have access to a choice of higher level ethanol blends that are less expensive, yet higher in octane," Bob Dinneen, president of the Renewable Fuels Association, told The Wall Street Journal.
AAA is not the only organization asking for revisions to the RFS. The American Petroleum Institute asked the EPA to repeal the law, first enacted in 2007. NACS, the Association For Convenience & Fuel Retailing, stated that revisions must be made to the RFS.
According to the Journal, the EPA is listening to these concerns. A draft copy of the 2014 standard suggests that the EPA will propose a standard of 15.2 billion gallons, approximately 16 percent below the RFS' mandate.
If gas prices do rise due to the RFS or for other reasons, consumers can take some solace in the fact they are paying the lowest price for gasoline recorded this year. According to AAA, the average price of a regular gallon of gasoline yesterday was $3.28, one penny below the previous lowest price -- $3.29 -- recorded on Jan. 2.
Motorists in all 50 states are paying less for gasoline than one week ago. The current $3.28 national average is 13 cents cheaper than one month ago and 26 cents less than the same date last year.
Hawaii is the only state averaging higher than $4 per gallon at a price of $4.09. On the other side of the ledger, on Friday, Missouri became the first state since February to dip below the $3 threshold.
The best news for motorists could be yet to come. AAA predicts gasoline prices will decline further as sufficient supplies, flat demand and the shift to cheaper winter-blend gasoline take charge.