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Public Statements

85 Octane Revisited: A Column by Governor Dennis Daugaard

Statement

By:
Date:
Location: Unknown

I want to protect South Dakota consumers. I want to avoid a fuel shortage in South Dakota. And I want to keep gas prices down.

This spring, state inspectors discovered that some gas stations were selling low-grade 85 octane gasoline, but mislabeling the fuel as 87 octane. The state immediately acted to stop the practice of mislabeling, and turned the evidence from the inspections over to the Attorney General and states attorneys to consider prosecution.

As the Department of Public Safety (DPS) staff was investigating the mislabeling, it made a surprising discovery -- that a legal technicality made 85 octane fuel illegal in South Dakota. 85 octane has been sold in South Dakota for decades, and it is the primary low-grade fuel offered in the Black Hills. But it turned out that it was technically illegal all along. I asked Attorney General Jackley to look into the matter, and he confirmed this finding.

Western South Dakota gets its fuel from Colorado and Wyoming, where 85 octane is refined and sold. Refiners told me that, if the state immediately banned 85 octane, there would be fuel shortages West River. July and August have a high risk for fuel shortages anyway because of the busy travel and tourism season. In fact, late last week I waived regulations on the hours of operation for fuel trucks to allow fuel to be trucked into South Dakota more quickly, because areas of the state were coming close to shortages.

Based on the information from refiners and suppliers, I decided that South Dakota could not risk an immediate ban on 85 octane -- a ban that would be based on a technicality. Instead, I have issued emergency rules that fix the technicality and allow 85 octane to continue to be sold.

At the same time, I have ordered unprecedented steps to protect South Dakota consumers. Some automakers advise against using 85 octane fuel. For the first time, under the emergency rules I issued, gas stations will be required to display cautionary labels on pumps that sell 85 octane. I want consumers to know the facts and decide whether they should use 85 octane in their cars.

I have also ordered state inspectors to purchase new equipment that will allow them to test octane levels at the pump. In the past, inspectors could only discover mislabeling based on the paperwork kept by the gas stations. That doesn't make sense. I am not going to tolerate mislabeling. State inspectors will now have an enhanced ability to find mislabeling and stop it.

Some critics have expressed skepticism about the threat of a gas shortage. They allege that the refiners and suppliers are exaggerating the problem. I want to find out the truth. Over the next few months, the State will hold open, public hearings to decide, in the long-term whether 85 octane should be allowed in South Dakota. At that hearing, we will be able to ask tough questions of the suppliers about the threat of a shortage. Everyone with an opinion will have a chance to be heard.

But in the short term, South Dakota cannot risk a gas shortage over the summer. We will accept the word of the refiners in the short term, while we scrutinize their claims for the long term.

Critics have also accused me of allowing fuel to be sold in South Dakota that can harm automobile engines. This criticism ignores that fact that 85 octane is nothing new in South Dakota -- it has been sold here for decades.

The State is not endangering consumers. It is protecting consumers more than ever by getting tough on mislabeling, adding cautionary labels on 85 octane for the first time, strengthening state inspections, and holding public hearings to scrutinize the threat of shortages.

We should be cautious about more regulation. More regulation of the free market leads to less consumer choice and higher gas prices.

I believe in free markets and fair markets, based upon honest information. The State is ensuring that consumers have good information -- so they can decide whether to purchase cheaper 85 octane, or whether to pay a little more for 87 octane or another product.


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