Does U.S. EPA have the authority to approve a higher fuel blend of ethanol for certain vehicles? During today's OnPoint, Charles Drevna, president of the National Petrochemical and Refiners Association, discusses a new lawsuit filed against EPA for its recent E15 decision. He also discusses his expectations for the new Congress and explains why he believes his organization may be treated differently by the new House leadership.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Charles Drevna, president of the National Petrochemical and Refiners Association. It's nice to see you again.
Charles Drevna: Nice to see you again and thanks for having me and happy New Year to you and all your fine crew here.
Monica Trauzzi: Happy New Year, thank you. Charlie, NPRA filed suit against EPA earlier this week for its approval of E15. Why isn't the jump from a 10 percent blend to a 15 percent blend a good one?
Charles Drevna: Well, it's a 50 percent increase, which, by anyone's calculus, is a large increase. But that being said, Monica, EPA has to, we believe, has to look at the total automobile, the total fuel system, just not one small portion, the emissions controls. They also, in our opinion, under the Clean Air Act, can't pick and choose which vehicle or which engine you can use a certain fuel for. We don't believe the Clean Air Act allows that. So we think a partial certification on only new vehicles, while the consumer is left out, you know, literally could be left out in the cold on any number of other applications, you know, snowmobiles, lawnmowers, chainsaws, older automobiles. And we don't even believe that the data is in enough for the newer automobile. So we are concerned that EPA is putting politics ahead of consumer safety.
Monica Trauzzi: So, if they were to take a broader approach to this and include more types of vehicles, would you then support that?
Charles Drevna: If the data would indicate that E15 or any blend over E10 would not harm any engine and would not harm the consumer, naturally, we would say sure.
Monica Trauzzi: Well, EPA would argue that tests have been done and the data is clear, that they can move forward with this.
Charles Drevna: Well, I think EPA is sort of gilding the lily there quite a bit when they say tests have been done. First of all, the testing didn't come in until the day before they announced, or they published the regulation. And, again Monica, it was only a certain portion of the automobile that they tested. It was only the emissions system, not the total automobile bumper-to-bumper and what impact E15 may have on it. So, there's been this controversy about liability. Our position is we shouldn't be arguing over liability. Who's going to be liable in case there's a mishap? Who's going to be liable in case there's misfueling? We shouldn't have to argue over that if we all agreed that the data is sufficient, the science is proven and the Clean Air Act is followed. We don't believe any of that has occurred yet and that's why we filed suit.
Monica Trauzzi: Some might think that the trade organization representing refiners is simply trying to protect its interests when it comes to this suit, namely the fact that ethanol would be displacing the products that your industry is producing. So, how concerned are you about the economics of this all and how a 5 percent increase in the amount of ethanol that's being blended would impact your industry?
Charles Drevna: Well, Monica, we're already living under Energy Independence and Security Act of '07, which stipulates we have to be blending a lot more ethanol and other biofuels into our product. So that's the law of the land and we accept that, but we have to, I think, as a country, live by the rule first do no harm. And if and when these fuels can be proven to be a safe, reliable, effective fuel we say fine.
Monica Trauzzi: So, you're not just trying to buy a little more time for your industry?
Charles Drevna: Not at all. What we're trying to do is make sure that we continue to provide to our consumers, to the American people, a fuel that they can rely on and it's safe, efficient, and reliable. And that's our concern. We believe EPA has turned a blind eye to the consumer on this and, quite honestly, it's quite frustrating and perplexing.
Monica Trauzzi: Let's switch gears and talk about the new Congress. How do you believe your organization may be treated differently by the Republican-led House?
Charles Drevna: I think we will get a fair hearing. I think all industry, all business and the NGOs and everyone else will get a fair hearing. We believe, at least from my organization's viewpoint, from my personal viewpoint, we didn't get a fair hearing on greenhouse gases, on how Waxman-Markey or Kerry-Boxer was developed. We believe we were left out in the cold on that one. We understand that and, in our opinion, the American people in November said, no, we don't want to do it this way. And, you know, we're not opposed to regulating, if regulation is called for. We want balance. We believe we didn't get that balance in the 111th. We look more toward the balance in the 112th.
Monica Trauzzi: So you think you'll get a fair hearing. Do you think the discussions will be looking back to how things were handled last year or they look forward to how things should be handled in the future?
Charles Drevna: Well, I think, I believe that we shouldn't go so far back in the rearview mirror, because there are many things on the books right now that we're complying with, that industry has invested significant dollars. What we should be looking for looking back a little bit, where can we make corrections that impact jobs and impact the economy? Where can we make sure we don't make those mistakes going forward that impact jobs and impact the economy? And that should be the focus. President Obama himself said we're going to tackle the economy. We're going to tackle the jobs. What we don't want to have happen is EPA fail us for a loss.
Monica Trauzzi: And you believe that EPA regulation of emissions could do just that?
Charles Drevna: Right.
Monica Trauzzi: And that's going to be one of the big discussions on the Hill this winter.
Charles Drevna: Regulation of greenhouse gas emissions under the Clean Air Act, absolutely. We stated that position even during the Bush administration, that the Clean Air Act is not the mechanism to control or regulate greenhouse gases. And you still have to take a look at jobs, the economy, and what all the impacts of these various initiatives have on that and have on the environment. And when you look at what they're proposing, we see an increase in CO2 emissions because the jobs and the manufacturing is going to be shipped overseas. So we see it as an all cost, no benefit kind of rule for the consumers in the United States, again, who, in our opinion, summarily dismissed that in November.
Monica Trauzzi: So, how do we regulate emissions then? If it's not through the Clean Air Act, if it's not through cap and trade legislation on the Hill, what do we do?
Charles Drevna: Well, I think maybe regulate emissions isn't the right term. Maybe let's talk about technology. We have the best and the brightest in this country. People copy us in technology. We were the leaders. We should, again, establish that leadership. Let's put our efforts collectively into efficiency, into conservation and building that better mousetrap without trying to create winners and losers within certain segments of industry. And that's how we think it should be done. You know, if you can come up with technology, not mandate it, because mandating technology has proven to be an abysmal failure in the past.
Monica Trauzzi: How far do you think efforts to stop EPA from regulating greenhouse gas emissions will go in Congress?
Charles Drevna: Well, you're looking at the Rockefeller amendments right now that would at least delay it for two years. You have Senator Murkowski talking about even a permanent delay. I think when you get a bipartisan look at what EPA is trying to do. Again, look, the midterm elections, the center of the country summarily rejected a cap and trade. I think it would be very harmful to the consumer, very harmful to the economy to try to backdoor it through the Clean Air Act with regulations through EPA at this time. Apparently Senator Rockefeller and others believe the same thing.
Monica Trauzzi: OK, we'll end it right there. Thank you for coming on the show, nice to see you.
Charles Drevna: Thank you for having me. It's always a pleasure, Monica.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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