WASHINGTON – Senator Chuck Grassley of Iowa has questioned executives of Big Oil about statements made under oath during a Congressional hearing that apparently contradict current company policies as outlined in an April 2 Wall Street Journal article.
Grassley sent similar letters to Exxon, British Petroleum, Chevron and Conoco Phillips asking for an explanation of their statements at a March 14, 2006 Senate Judiciary Committee hearing. At the hearing, all four representatives of the companies indicated their support for allowing E-85 to be sold at their company’s gasoline stations. But, as Grassley indicates in his letter, a Wall Street Journal article provided several details of obstacles each company apparently uses to prohibit or strongly discourage the sale of alternative fuels.
"Renewable fuels are a key factor in our energy future and it appears Big Oil is throwing up roadblocks every chance they get," Grassley said.
Grassley’s letters come as he speaks at a grand opening for an ethanol plant in Southwest Iowa. Grassley will tell farmers, investors and community members that "the impact (of high gas prices) is being felt around the country by working families, farmers, businesses and industries. Soaring energy costs could jeopardize our economic security and vitality... We also need to make sure that the ethanol from this plant has a chance to become a true alternative fuel, not just a small blend component in traditional gasoline. We’ll push to make sure that E-85 vehicles and fuels see even greater market penetration."
Grassley has taken the lead in enacting legislation that includes tax incentives for the production of homegrown ethanol and biodiesel. The 2005 energy bill included an extension of the small ethanol producer tax credit. A tax credit for biodiesel, similar to that of ethanol, was also included in the energy bill. Grassley also led the effort to include a provision that allows taxpayers to claim a 30 percent credit for the cost of installing clean fuel vehicle refueling stations. This would include pumps for both E85 and B20 pumps.
Here are copies of the Wall Street Journal article as well as the pertinent section of the Judiciary Committee transcript.
Here is a copy of each letter.
May 3, 2007
Mr. Rex Tillerson
Chairman and Chief Executive Officer
Exxon Mobil Corporation
5959 Las Colinas Boulevard
Irving, Texas 75039-2298
Dear Mr. Tillerson,
For many years, I’ve been supporting and promoting ethanol and biodiesel fuels as a way to reduce our dependence on foreign and traditional energy sources, and increase our national security and rural economies. Our nation is now consuming five billion gallons of ethanol annually, and is estimated to produce as much as eleven billion gallons annually by 2009.
In an effort to further reduce America’s oil dependence, it’s imperative that higher ethanol blends be available to consumers. While our domestic auto manufacturers are leading the effort to expand the flex-fuel vehicle market, more must be done to expand the fuel’s availability. Of the 170,000 stations nationwide, only 1,100 currently offer E-85. This represents less than one percent of fuel stations.
As you may recall, on March 14, 2006, you testified under oath before the Senate Judiciary Committee. At the hearing, I asked if you would commit to allow independent owners of branded stations to sell E-85 or B-20, and if you would allow those station owners to purchase the alternative fuel from any outlet. For your benefit, I’ve enclosed a copy of the hearing transcript.
In your response to me, you stated that Exxon Mobil has denied no request from any dealers who sought permission to sell unbranded E-85. In addition, you stated that every request to sell the fuel under the canopy has been granted. Your testimony before the committee clearly stated that Exxon Mobil was perfectly willing to allow the sale of alternative fuels at Exxon Mobil stations. However, a recent Wall Street Journal article, which I’ve enclosed, detailed many of the obstacles your company and other major integrated oil companies apparently use to effectively prohibit or strongly discourage the sale of alternative fuels.
In fact, Exxon Mobil’s standard contract bars Exxon stations from buying fuel from anybody but Exxon – a fact you chose not to disclose to the committee. It also appears that even in cases where exceptions are made, Exxon requires those station owners to install entirely separate dispensers, for the purpose of "minimizing customer confusion," according to an Exxon spokeswoman. It seems this policy has much more to do with limiting the availability of alternative fuels than customer confusion.
I would appreciate hearing your explanation as to why you led me, the Judiciary Committee and the American people to believe that Exxon Mobil supports making E-85 available to your customers, yet your company is described by the Wall Street Journal as a key obstacle to expanding the availability of alternative fuels. I would appreciate knowing exactly what Exxon Mobil is doing to grow the E-85 market, and why you believe your tactics aren’t simply obstacles, as claimed by the Wall Street Journal.
I look forward to receiving your response not later than May 25, 2007.
Sincerely,
Charles E. Grassley
United States Senate
May 3, 2007
Mr. Robert A. Malone
Chairman and President
British Petroleum America, Inc.
501 Westlake Park Blvd.
Houston, Texas 77079
Dear Mr. Malone,
For many years, I’ve been supporting and promoting ethanol and biodiesel fuels as a way to reduce our dependence on foreign and traditional energy sources, and increase our national security and rural economies. Our nation is now consuming five billion gallons of ethanol annually, and is estimated to produce as much as eleven billion gallons annually by 2009.
In an effort to further reduce America’s oil dependence, it’s imperative that higher ethanol blends be available to consumers. While our domestic auto manufacturers are leading the effort to expand the flex-fuel vehicle market, more must be done to expand the fuel’s availability. Of the 170,000 stations nationwide, only 1,100 currently offer E-85. This represents less than one percent of fuel stations.
On March 14, 2006, Mr. Ross Pillari, former Chairman of BP America, testified under oath before the Senate Judiciary Committee. At the hearing, I asked Mr. Pillari if BP would commit to allow independent owners of branded stations to sell E-85 or B-20, and if BP would allow those station owners to purchase the alternative fuel from any outlet. For your benefit, I’ve enclosed a copy of the hearing transcript.
In his response to me, Mr. Pillari stated that British Petroleum was already allowing independently owned stations to freely deploy E-85. His testimony before the committee clearly stated that British Petroleum was perfectly willing to allow the sale of alternative fuels at BP stations. However, a recent Wall Street Journal article, which I’ve enclosed, detailed many of the obstacles your company and other major integrated oil companies apparently use to effectively prohibit or strongly discourage the sale of alternative fuels.
The Wall Street Journal article indicated that BP prohibits branded stations from including E-85 on gasoline dispensers, perimeter signs or light poles. Another obstacle employed by your company is the prohibition on using pay-at-the-pump credit card machines for E-85 purchases. It seems these policies are in place simply to limit the availability and sale of alternative fuels, rather than prevent customer confusion.
I would appreciate hearing your explanation as to why Mr. Pillari led me, the Judiciary Committee and the American people to believe that British Petroleum supports making E-85 available to your customers, yet your company is described by the Wall Street Journal as a key obstacle to expanding the availability of alternative fuels. I would appreciate knowing exactly what BP is doing to grow the E-85 market, and why you believe your tactics aren’t simply obstacles, as claimed by the Wall Street Journal.
I look forward to receiving your response not later than May 25, 2007.
Sincerely,
Charles E. Grassley
United States Senator
May 3, 2007
Mr. David J. O’Reilly
Chairman and Chief Executive Officer
Chevron Corporation
6001 Bollinger Canyon Road
San Ramon, CA 94583
Dear Mr. O’Reilly,
For many years, I’ve been supporting and promoting ethanol and biodiesel fuels as a way to reduce our dependence on foreign and traditional energy sources, and increase our national security and rural economies. Our nation is now consuming five billion gallons of ethanol annually, and is estimated to produce as much as eleven billion gallons annually by 2009.
In an effort to further reduce America’s oil dependence, it’s imperative that higher ethanol blends be available to consumers. While our domestic auto manufacturers are leading the effort to expand the flex-fuel vehicle market, more must be done to expand the fuel’s availability. Of the 170,000 stations nationwide, only 1,100 currently offer E-85. This represents less than one percent of fuel stations.
As you may recall, on March 14, 2006, you testified under oath before the Senate Judiciary Committee. At the hearing, I asked if you would commit to allow independent owners of branded stations to sell E-85 or B-20, and if you would allow those station owners to purchase the alternative fuel from any outlet. For your benefit, I’ve enclosed a copy of the hearing transcript.
In your response to me, you stated that Chevron was already allowing station owners to sell E-85, and that it was available and under the canopy. Your testimony before the committee clearly stated that Chevron was perfectly willing to allow the sale of alternative fuels at Chevron stations. You proudly stated that Chevron is one of the largest sellers of ethanol. However, a recent Wall Street Journal article, which I’ve enclosed, detailed many of the obstacles your company and other major integrated oil companies apparently use to effectively prohibit or strongly discourage the sale of alternative fuels.
In fact, Chevron’s agreement with franchisees discourages selling E-85 under the main canopy and includes policies that are claimed to prevent franchisees from deceiving customers as to the source of the product. The Wall Street Journal article indicated that Chevron recommends that E-85 pumps be outside the canopy, and that Chevron prohibits branded stations from including E-85 on signs listing fuel prices. It seems these policies are in place simply to limit the availability and sale of alternative fuels, rather than prevent customer deception.
I would appreciate hearing your explanation as to why you led me, the Judiciary Committee and the American people to believe that Chevron supports making E-85 available to your customers, yet your company is described by the Wall Street Journal as a key obstacle to expanding the availability of alternative fuels. I would appreciate knowing exactly what Chevron is doing to grow the E-85 market, and why you believe your tactics aren’t simply obstacles, as claimed by the Wall Street Journal.
I look forward to receiving your response not later than May 25, 2007.
Sincerely,
Charles E. Grassley
United States Senator
May 3, 2007
Mr. James J. Mulva
Chairman and Chief Executive Officer
Conoco Phillips Company
600 North Dairy Ashford Road
Houston, Texas 77079-1175
Dear Mr. Mulva,
For many years, I’ve been supporting and promoting ethanol and biodiesel fuels as a way to reduce our dependence on foreign and traditional energy sources, and increase our national security and rural economies. Our nation is now consuming five billion gallons of ethanol annually, and is estimated to produce as much as eleven billion gallons annually by 2009.
In an effort to further reduce America’s oil dependence, it’s imperative that higher ethanol blends be available to consumers. While our domestic auto manufacturers are leading the effort to expand the flex-fuel vehicle market, more must be done to expand the fuel’s availability. Of the 170,000 stations nationwide, only 1,100 currently offer E-85. This represents less than one percent of fuel stations.
As you may recall, on March 14, 2006, you testified under oath before the Senate Judiciary Committee. At the hearing, I asked if you would commit to allow independent owners of branded stations to sell E-85 or B-20, and if you would allow those station owners to purchase the alternative fuel from any outlet. For your benefit, I’ve enclosed a copy of the hearing transcript.
In your response to me, you simply associated yourself with the statements made by the other witnesses. That association led me to believe that Conoco Phillips was already allowing independently owned stations to freely deploy E-85 under the canopy. Your testimony before the committee clearly indicated that Conoco Phillips was perfectly willing to allow the sale of alternative fuels at branded stations. However, a recent Wall Street Journal article, which I’ve enclosed, detailed many of the obstacles your company and other major integrated oil companies apparently use to effectively prohibit or strongly discourage the sale of alternative fuels.
The Wall Street Journal article indicated that Conoco Phillips does not allow E-85 sales on the primary island under the canopy. This policy directly contradicts the statements to which you associated yourself during the March 2006 hearing.
I would appreciate hearing your explanation as to why you led me, the Judiciary Committee and the American people to believe that Conoco Phillips supports making E-85 available to your customers, yet your company is described by the Wall Street Journal as a key obstacle to expanding the availability of alternative fuels. I would appreciate knowing exactly what Conoco Phillips is doing to grow the E-85 market, and why you believe your tactics aren’t simply obstacles, as claimed by the Wall Street Journal.
I look forward to receiving your response not later than May 25, 2007.
Sincerely,
Charles E. Grassley
United States Senator