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Posted on  

April 3, 2002

Ethanol Industry Urges Kinder Morgan to Allow Gasoline Blendstocks for Ethanol Through California Pipeline System

WASHINGTON, DC – As reports continue to appear that several California oil refiners prefer to switch from MTBE to ethanol by the end of this year, the Renewable Fuels Association (RFA) urged Kinder Morgan, which operates California’s only common carrier pipeline system, to allow shipments of gasoline blendstocks for ethanol. If Kinder Morgan decides to allow only MTBE-blended gasoline through their pipelines, oil companies will feel compelled to continue using MTBE, a water-polluting gasoline additive, instead of switching to ethanol.

“According to several news reports, four of California’s six major oil companies prefer to switch from MTBE to ethanol this year,” said Bob Dinneen, RFA president. “Kinder Morgan has stated they could accommodate both fuels and was recently quoted saying, ‘They’re [oil companies] our customers. We’ll do what they want.’ We are writing to urge Kinder Morgan to follow up on their public comments. The message is clear. The majority of California oil companies want to use ethanol. Kinder Morgan should accommodate their needs. By doing so, the opportunities for further MTBE drinking water contamination can be reduced.”

In a letter to Kinder Morgan Chairman Richard Kinder, Dinneen wrote:“In the aftermath of California Governor Gray Davis’ decision to delay the MTBE phase out, several oil companies have expressed a preference to move forward with their plans to eliminate the use of MTBE in the state as originally scheduled. As the sole common carrier pipeline operating in California, however, your company’s decisions will to a large extent determine whether those oil companies preferring to use ethanol will indeed be able to do so. Consequently, I am writing to urge you to allow gasoline blendstocks for ethanol to be shipped on the Kinder-Morgan pipeline, thereby providing refiners and consumers in California access to MTBE-free gasoline.

“The domestic ethanol industry has demonstrated there are sufficient supplies of ethanol to replace MTBE, refiners have testified to their readiness to meet the original phase out deadline, and state water officials are adamant that drinking water supplies be protected. More importantly, consumers across California overwhelmingly believe MTBE should be removed from gasoline.

“I understand the uncertainty created by the Governor’s decision to delay his March 1999 Executive Order has made investment decisions more difficult. That uncertainty is complicated further by legislative activity in Washington, D.C. that will affect oxygenate and renewable fuel use in California and across the country. But under any circumstance, it is clear the demand for ethanol will increase in California, and any investments necessary to accommodate the use of ethanol today will certainly pay dividends quickly.

“The petroleum industry and the ethanol industry are looking for workable solutions to the MTBE issue in California, but no transition plan can be effective if the only common carrier pipeline responsible for transporting the majority of gasoline across the state restricts the opportunities to use ethanol blended gasoline.

“Because of Kinder Morgan’s unique and critical role in supplying gasoline throughout California, it is our goal to work with you and the petroleum industry to create the best opportunities for consumers in the state. I hope that you will be willing to work with our member companies to accommodate those refiners and gasoline marketers preferring to use ethanol blended gasoline now, rather than when MTBE is banned by the State of California.”


For more information, visit the Renewable Fuels Association website at: www.ethanolRFA.org
 

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