(April 7, 2011)  Washington –  Bob Dinneen, the President and CEO of the Renewable Fuels Association (RFA), the leading trade association for American ethanol producers, will tell the Senate Energy and Natural Resources Committee today that the goals of federal Renewable Fuels Standard (RFS) and the commercialization of advanced ethanol technologies will not happen without meaningfully expanding the market for ethanol-blended fuels.

“For [the RFS’s] ultimate goal of 36 billion gallons of renewable fuel use to be realized, however, additional federal efforts to open markets, stimulate investments in new technologies and assist in the development of infrastructure for these new fuels will be necessary,” RFA President and CEO Bob Dinneen will say in prepared testimony.

In his testimony, Dinneen will specifically identify four policy and regulatory steps that are needed to allow ethanol-blended fuels to gain greater market share against the monopoly oil interests have on the U.S. gasoline market. Those steps include:

• At a minimum, federal policies should maintain and extend existing tax incentives for higher level ethanol blends to allow for continued growth

• The use of E15 and potentially higher level blends should be approved for use in all gasoline-powered vehicles based upon sound technical evidence

• Congress should expand tax incentives to gasoline retailers for refueling infrastructure beyond the existing alternative fuels infrastructure tax credit

• Congress should create new consumer-based tax incentives to encourage the purchase of flexible fuel vehicles (FFVs) capable of utilizing higher level ethanol blends

Additionally, Dinneen will offer support for legislative action that requires a percentage of new vehicles sold in the U.S. be flexible fuel capable as well as the installation of higher level ethanol blends refueling infrastructure.

“At a minimum, federal policies should maintain and extend existing tax incentives for higher level ethanol blends to allow for continued growth, expand tax incentives for refueling infrastructure, and create new consumer-based tax incentives to encourage the purchase of FFVs,” Dinneen testified.

Currently, ethanol represents approximately 10 percent of the nation’s gasoline, with nearly 14 billion gallons of production expected in 2011. The RFA estimates some 8.5 million vehicles currently on the road are FFVs representing the largest alternative fuel vehicle fleet, far outnumbering natural gas vehicles, plug-in hybrids, electric vehicles, and other alternative fuel vehicles. Additionally, there are approximately 2,700 out of some 162,000 retail gas stations offer ethanol blends above the standard E10 (10% ethanol).

According to a study conducted by Air Improvement Resource, Inc. (AIR) and commissioned by the RFA, the long-term requirements of the RFS can indeed be met mostly with ethanol if blender pumps are made available at approximately one-third of nation’s 162,000 service stations, and if automakers honor and expand their commitment to produce more FFVs.

“Expanding the use of ethanol will take a multi-pronged approach. The EPA’s approval of E15 for use in vehicles made in 2001 and subsequent years will help grow the potential market for ethanol to approximately 20 billion gallons over the next several years. Still, even if E15 is eventually used in all conventional vehicles, meeting long term RFS requirements with ethanol will necessitate a substantial increase in the availability and use of “mid-level” ethanol blends (i.e., blends consisting of more than 15 percent ethanol and less than 85 percent gasoline). If all light-duty vehicles sold in the United States in 2015 and later years are FFVs, and if a corresponding expansion of refueling infrastructure occurs, ethanol could be used to meet the majority of the long-term RFS2 requirements.”

Expanding ethanol fueling infrastructure is one part of the policy transformation America’s ethanol industry is currently contemplating. Any plan that transitions and transform current ethanol policy must also include elements that recognize the importance and volatility of oil and gasoline markets as well as accelerate the commercialization of cellulosic and advanced ethanol technologies.

Dinneen's full testimony as prepared can be read here.