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RFA Urges New Hampshire to Reject Ethanol Ban

March 24, 2011


The New Hampshire House of Representatives recently voted to ban corn-based ethanol in the state.  As this bill has now been sent to the Senate to be voted on, Renewable Fuels Association (RFA) President and CEO Bob Dinneen wrote a letter urging the New Hampshire lawmakers to reject HB 374. Dear Senator: On behalf of existing and future ethanol producers, I urge you to reject HB 374.  This legislation would eliminate the only viable alternative to imported oil available to New Hampshire motorists and is premised on misinformation about the role of ethanol in the fuel market. In supporting his bill, Representative David Campbell erroneously claimed that ethanol was responsible for driving gasoline prices higher.  In today's gasoline market, pure gasoline is selling at a higher price than ethanol at the wholesale level.  As of March 24, wholesale gasoline in New Hampshire was selling for $3.09 per gallon.  By comparison, ethanol at the wholesale level was selling for $2.55 per gallon.  That is an immediate $0.54 savings for gasoline marketers.  Importantly, that is before marketers claim the $0.45 per gallon federal tax credit for using ethanol.  All told, that is $0.99 savings for marketers.  Therefore, when these marketers blend gasoline with 10 percent ethanol (E10) as is the common blend found in New Hampshire, drivers are saving nearly a dime on each gallon of E10 they use. In fact, ethanol is the only alternative fuel that is putting any downward pressure on gasoline and oil prices.  At 10 percent of the nation's gasoline supply, ethanol is backing out demand for imported oil and mitigating some of the economic damage oil prices perpetually over $100 per barrel wreak on the U.S. economy and the budgets of American households.  In 2010 alone, the more than 13 billion gallons of ethanol produced and used in the U.S. reduced our appetite for imported oil by 445 million barrels valued at $34 billion, according to a study by Cardno ENTRIX economist John Urbanchuk. Also troubling is the insistence that the state ban just corn-based ethanol.  While I strongly support the enthusiasm and desire to commercialize new ethanol technologies, banning existing ethanol production would eliminate the very market into which advanced and cellulosic ethanol producers will one day want to sell.  Developing ethanol technologies that use the abundance of biomass available in the Northeast requires that existing ethanol technologies and markets be successful.  HB 374 would seek to undermine that success. Finally, there are serious questions relating to the legal authority of the state to undermine federal renewable energy policy and the Clean Air Act. For nearly 30 years, ethanol-blended fuel has been safely and effectively used in all engine platforms across the nation.  It has helped America begin a transition to a more self-sufficient energy future by increasingly reducing our dependence on imported oil.  As oil prices continue to rise, the role of domestically-produced renewable fuels like ethanol becomes even more important. I humbly urge you to reject HB 374.  Should such a provision pass and become law, it would force the price of gasoline for all New Hampshire drivers to rise during a time of already volatile fuel prices for everything from gasoline to heating oil. Should you have further questions or need more information on the American ethanol industry, please feel free to contact the Renewable Fuels Association at 202.289.3835 or on the web at Sincerely, Bob Dinneen, President and CEO Renewable Fuels Association