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Boutique Fuels - June 23, 2006 Response

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            To:  Andrew Beck

             Thank you for the opportunity to comment on the draft report of the Governors' Task Force on Boutique Fuels.  Having reviewed the draft, ILTA has concluded that it fails to provide the information that President Bush requested.

            As the report states in the Executive Summary, the Task Force was charged with identifying opportunities to increase cooperation among the federal government and the states on gasoline supply decisions and to reduce the number of boutique fuels.

            The report contains no recommended opportunities for increasing cooperation.  Regional clean fuel programs are mentioned as a "possible" means of cooperation.  The Executive Summary states in the fourth bullet that "careful consideration should be given to the possibility of new legislative authority which would allow for the adoption of regional clean fuel programs."  This vague statement is not a recommendation.

            The report fails to identify even a single opportunity to reduce the number of boutique fuels. It is weighted heavily toward support of boutique fuels in line with the views of the state regulators and the environmental groups.  In Section VIII, EPA Recommendations and Observations, the report states that "EPA's review did not reveal any studies or empirical data confirming that boutique fuels presently contribute to higher fuel prices or present unusual distribution problems."  This amounts to a casual dismissal of the industry's position on the economic realities inherent in our nation's fuel market.  All EPA had to do was review the records of one of its own actions after Hurricane Katrina.  EPA was compelled by an impending gasoline shortage to grant a waiver for use of winter blend RFG in place of the more scarce summer blend that was otherwise required to be used through September 15.  The granting of this EPA waiver is a recent, compelling illustration of the adverse impact of boutique fuels on gasoline supplies and price volatility. 

            ILTA is disappointed in your conclusion that state renewable fuel programs are outside the scope of the Task Force.   The long-term consequences of these programs, especially in terms of the impact on the reliability of fuel supplies, should have been addressed in the report.

            Finally, we would note that EPA has vast analytical resources at its disposal.  By relying on the manpower and expertise of contractors, EPA could have responded to President Bush's request much earlier and much more aggressively with legitimate recommendations.  Unfortunately, this did not occur.

            David Doane

            President, ILTA

 

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