Business Week profiles oil industry efforts to halt adoption of E85; links spread of “food vs. fuel” articles to oil-funded studies

Business Week ran a stinging article on the efforts of oil companies to slow the spread of E85. The article pointed out that, as fuel blinders, it is the oil industry that receives the 51 cent per gallon tax credit for ethanol, but the industry – which did not request the subsidy – has been funding anti-biofuel studies, stimulating a food vs. fuel debate by suggesting that biofuels are driving up the price of food, and not launching E85 through their own brands, forcing eE85 to be distributed through independents.

The Business Week article said that the opposition from biofuels advocates was expected, but that Big Oil has earned the enmity of US automakers, who are pushing E85 for among other reasons, the potential of E85 to relieve them of a $100 billion investment in reaching tough CAFE emission standards. The article quoted Mark N. Cooper, research director at the Consumer Federation of America, in saying that Big Oil has “reacted aggressively against the expansion of ethanol production, suggesting that it perceives the growth of biofuels as an independent, competitive threat to its market power in refining and gasoline marketing.”

The food vs. fuel debate picked up in June on the heels of a report released by the American Petroleum Institute that concluded that consumers would pay “$12 billion-plus a year more for food as corn prices rise to meet ethanol demand.”

Global Insights, which authored the report for API, said that the fact that API paid Global Insights to prepare the anti-ethanol report did not influence Global Insights’ decision to reach anti-ethanol conclusions.

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