WASHINGTON, DC – The Subcommittee on Environment, chaired by Rep. John Shimkus (R-IL), today held a hearing examining the potential for high octane fuels and the vehicles designed for them. Members looked at the impact of a potential transition to high octane fuels and vehicles on refiners, biofuel producers, automakers, fuel retailers, and consumers.
“One potential flaw with the RFS and with CAFE/GHG is that the two programs have never been fully coordinated with one another. The RFS doesn’t necessarily give us the liquid fuel formulations that maximize energy efficiency, and CAFE/GHG doesn’t necessarily result in the kinds of engines that make the best use of biofuel blends,” said #SubEnvironment Chairman Shimkus. “At a March hearing, we learned about DOE’s Co-Optima initiative that is looking to maximize efficiency by using high octane fuels and engines specifically designed to run on these fuels. Ideally, this could benefit everyone from corn growers and biofuels producers, refiners, automakers, and most important of all, consumers.”
Timothy Columbus, General Counsel, Society of Gasoline Marketers of America and National Association of Convenience Stores, outlined the importance of the market and its role in shaping the appropriate fuel blends, stating, “In considering any change to the fuels market, it is relevant to consider how the market will adjust to meet new requirements. In the case of the octane solution, the key to successful retailer integration is the flexibility of the RON [Research Octane Number] regime. As previously discussed, if a fuel meets RON and RVP [Reid Vapor Pressure] specifications, it is up to the market to determine which fuel blends are desired by customers.”
Dan Nicholson, Vice President, Global Propulsion Systems, General Motors, testifying on behalf of the United States Council for Automotive Research, discussed the importance of 95 RON blends, stating, “We have an opportunity to play a large role in offering consumers the most affordable option for fuel economy improvement and greenhouse gas reduction. We believe a higher efficiency gasoline solution with a higher Research Octane Number (RON) is very important to achieving this. USCAR research shows that 95 RON makes sense from the viewpoints of both refiners and fuel retailers… Without this new fuel, we will continue to endure the impacts of fuel variation and forego related available fuel economy improvement opportunities.”
Witnesses testify before #SubEnvironment
Chet Thompson, President and CEO, American Fuel and Petrochemicals Manufacturers, discussed the potential benefits of 95-RON fuel if implemented properly, stating, “If done correctly – through free market principles, the sunsetting of the RFS, and implemented over a reasonable phase-in-period – higher octane fuels have the potential to benefit all stakeholders. Higher octane fuels, specifically 95-RON, would help auto companies improve the efficiency of the internal combustion engine and comply with fuel efficiency standards. It would provide the biofuel industry with the opportunity to expand its market share. It would end the RFS for refiners and provide product flexibility for the marketers. And it could benefit consumers by creating a transparent and competitive market for all liquid fuels to compete.”
“The Energy and Commerce Committee takes our obligation to get fuels and vehicles policy seriously. A vehicle and the gas it runs on is a major expense for households as well as millions of small businesses, farms, and ranches,” concluded #FullCmte Chairman Greg Walden (R-OR). “Today, we explored an idea to facilitate compliance with the RFS while also improving fuel economy. We need to be especially mindful of the consumer impacts. We want the policy outcome that brings down the cost of driving. So questions about the impact on the price per gallon at the pump and on the sticker price of new vehicles will need to be addressed, as will questions whether this is the most cost-effective means to improve fuel economy and reduce emissions.”
The Majority Memorandum, witness testimony, and an archived webcast are available online HERE.