Are Oil Companies Limiting Access to Ethanol? Lawmakers Want Answers

Two senators are urging an investigation as to whether oil companies may have engaged in anti-competitive practices to limit consumer access to ethanol.

August 22, 2013

WASHINGTON – U.S. Sens. Chuck Grassley and Amy Klobuchar asked the Justice Department and Federal Trade Commission earlier this week to investigate whether oil companies have engaged in anti-competitive practices that may have limited consumer access to renewable fuels, the Des Moines Register reports.

The senators sent a letter to Attorney General Eric Holder and FTC Chairwoman Edith Ramirez, urging a review to address “reports indicating that oil companies may be undermining efforts to distribute renewable fuels, including higher ethanol gasoline blends.

“We are writing to express concerns that oil companies are engaging in anti-competitive practices aimed at blocking market access for renewable fuels,” Grassley, an Iowa Republican, and Klobuchar, a Democrat from Minnesota, said in the letter. “We urge you to investigate these allegations and, if true, whether they violate the nation’s antitrust laws.”

The lawmakers allege that some oil companies may have exceeded a reasonable exercise of their influence, citing some gas stations that are being required to sell higher-grade gasoline, at the expense of a pump that would offer renewable fuels. In another case, they point to an oil company using its franchise agreement to preclude franchisees from offering higher-level ethanol blends.

“There is zero doubt that many oil refiners are doing everything in their power to restrict consumer access to E15 and higher ethanol blends,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. “They all seek to restrict consumer access to lower cost ethanol blends like E15. So we applaud the senators for asking the relevant agencies to take a close look at this anti-competitive behavior.”

A spokesperson for the American Petroleum Institute said the organization is reviewing the letter.

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