Rep. Cliff Stearns

House Committee on Energy & Commerce

Gasoline: Supply, Price and Specifications

May 10, 2006

Mr. Chairman, thank you for turning this Committee’s focus to gasoline issues. 

While last week’s look at crude oil markets was illuminating, we now get back to more familiar issues on which we have legislated in the past and which have a serious impact on the price of gas at the pump.  In particular, I expect that the use of reformulated gasoline in the supply chain will dominate our discussions. 

The physical properties of ethanol, for instance, make it somewhat daunting to work with. We cannot ship gasoline mixed with ethanol via pipeline, because there tends to be residual water in the pipes, and ethanol is water-soluble. So, we must send the gasoline through the pipes, and the ethanol separately on trucks or rails, to be blended at terminals in what is called “splash blending.” This adds to the burden on the infrastructure for transportation and storage of gasoline, ethanol, and their blends, as well as raising the overall price tag.

Of course, even with a sufficient supply of ethanol, sources are not always located in close proximity to where we need the ethanol.  That is one reason why I have supported research into biofuels at the University of Florida, in hopes of developing cost-efficient and environmentally-suitable agricultural alternatives for creating ethanol.

Meanwhile, government mandates for specially reformulated gasoline across the country have led to a proliferation of boutique fuel requirements – each region or metro area demanding a different blend in order to meet certain air pollution goals under the Clean Air Act’s National Ambient Air Quality Standards, particularly for ozone.  The USA Today, finding at least 15 different fuel blend categories, declared yesterday that, “Gasoline is becoming like coffee at Starbucks – unnecessarily complex and pricey.” I look forward to hearing from Acting Assistant Administrator Wehrum about the Environmental Protection Agency’s implementation of provisions we passed in last year’s Energy Policy Act, and their efforts to reduce the number of boutique fuel requirements.

Mr. Chairman, thank you again for holding these two days of hearings.

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