This afternoon the House passed The Energy Independence and Security Act, an important piece of legislation designed to make America more energy independent. The bill, which expands the Renewable Fuel Standard and increases corporate average fuel economy (CAFE) standards for the first time in 32 years, also contains a key provision of Congressman Donnelly's bill, H.R. 2505, The Promoting the Use of Mixed Petroleum (PUMP) Act.
Specifically, the provision introduced by Congressman Donnelly would amend the Petroleum Marketing Practices Act to explicitly prohibit an oil company from restricting the right of a franchisee to install qualified alternative fuel vehicle refueling equipment, such as E-85 pumps.
While there are a number of reasons why ethanol has yet to mature on the market, a significant contributing factor is that many of the big oil companies use a variety of strategies to make it difficult for their franchised gas stations to offer ethanol. For example, the standard contract issued by many big oil companies prevents franchisees from purchasing fuel from anyone other than the franchise supplier. Since many suppliers do not sell E-85, the stations within that franchise cannot either.
"When faced with the possibility of losing profits, big oil companies have sought to eliminate the competition by prohibiting franchisees from selling alternative fuels," Donnelly said. "These tactics not only limit consumer choice, but also protect big oil profits and reinforce our dependence on non-renewable fuel sources. In passing The Energy Independence and Security Act, we are taking a crucial step in expanding the availability of E-85 so more Americans can take advantage of this clean fuel made from corn grown right here in Indiana."
In addition, The Energy Independence and Security Act increases fuel economy standards for the first time in 32 years. In an agreement reached by environmental groups, labor groups, and the American automotive industry, the bill would require automobile manufacturers to maintain a fleet-wide average of 35 miles per gallon by 2020. It's estimated that this provision alone will reduce oil consumption by 1.1 million barrels per day by 2020one half of the oil we currently import from the Persian Gulf.
Furthermore, the legislation also increases the Renewable Fuels Standard, which sets annual requirements for the amount of renewable fuels produced and used in motor vehicles. Under the bill, the expanded renewable fuels standard requires the use of 9 billion gallons of home-grown, renewable fuels in 2008 and progressively increases to a 36 billion gallon requirement by 2022.
"Today's legislation sets us on a path to energy independence, while also creating jobs right here in Indiana" said Donnelly. "By promoting alternative fuels like ethanol and bio-diesel, Hoosiers will play an important role in improving our national security, protecting our environment, and strengthening our communities."
The Energy Independence and Security Act, which has passed both the House and the Senate, will now go to the president for his signature.