April 15, 2012

Proposed bill relieves retailers of E15 liability

The Domestic Fuels Act of 2012, a bipartisan bill introduced March 30 in both houses of Congress, includes a provision that would make it illegal for a retailer to be held responsible for damages that could occur as a result of misfueling by consumers, so long as the retailer has complied with the U.S. EPA’s misfueling regulations. The proposed legislation would protect retailers against potential liability should consumers use E15 in small engines, vehicles produced earlier than model year 2001, or in any other nonapproved engine and would also prevent retailers from being held liable if the consumer’s use of a fuel voids the vehicle/small engine warranty.

The bill, which was introduced in the Senate by John Hoeven, R-N.D., and in the House by John Shimkus, R-Ill., would also allow the EPA to streamline its approval process to allow underground storage tanks and fuel dispensers to be used for a range of gasoline, diesel, ethanol and various ethanol blends. Current regulations make it difficult for some pieces of infrastructure to be certified for use with higher ethanol blends, meaning that retailers wishing to offer those types of fuel would likely have to invest in new tanks and dispensers specifically approved for those fuels, even though their existing infrastructure is compatible with the fuel blends. The proposed bill would streamline the certification process in an effort to alleviate the cost for retailers to offer additional fuel blends.

Initial co-signers of Senate version of the bill include Roy Blunt, R-Mo., Amy Klobuchar, D-Minn., and Mike Crapo, R-Idaho. Shimkus was joined by Reps. Mike Ross, D-Ark., John Sullivan, R-Okla., and Collin Peterson, D-Minn., in introducing the House version.

A unlikely group of nine various petroleum and biofuels representatives, including the American Petroleum Institute, the Renewable Fuels Association, Growth Energy and the National Association of Convenience Stores, came together to commend the legislators for introducing the bill, stating in a letter issued separately to the senators and congressmen on March 29 that the provisions in the bill are critical in removing technical barriers that are making it difficult to introduce new fuels to the market. “In particular, this bill will save many retailers across the country from needlessly investing hundreds of thousands of dollars to replace equipment that does not need to be replaced; it will protect innocent parties from certain liabilities associated with misfueling when consumers are informed about fuels that are approved for only certain engines; and it will establish that an entity who complies with today’s laws and regulations cannot be held retroactively liable even if those laws and regulations change tomorrow,” the group stated in the letter.

Bob Dinneen, president and CEO of the Renewable Fuels Association, further stated that the bill could help speed the introduction of E15 to the market and ultimately reduce the cost of fuel for consumers. “The Domestic Fuels Act could help deliver price relief at the gas pump for consumers while increasingly liberating this country from its unhealthy, unsafe dependence upon foreign oil,” he said in a statement.

Sponsors of the bill are continuing to recruit cosponsors, according to Ryan Bernstein, deputy chief of staff for Hoeven, and are encouraged by the early bipartisan support.

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