Midwestern Senators Call for Justice Department Investigation of Oil Companies’ Efforts to Block Ethanol
By Rebecca Cohen | August 21, 2013 3:52 pm

Sens. Charles Grassley (R-Iowa) and Amy Klobuchar (D-Minn.) asked the Justice Department and the Federal Trade Commission on Tuesday to investigate whether oil companies are breaking antitrust laws by undermining distribution of ethanol and other renewable fuels.

Sen. Charles Grassley (photo by Gage Skidmore)

The senators have heard reports that oil companies are forcing gas stations to carry premium gasoline if they want to sell regular gas, which takes away a pump that could be used to sell renewable fuels, Grassley and Klobuchar wrote in a letter to Attorney General Eric Holder and FTC Chairwoman Edith Ramirez. The oil companies’ actions might violate the Gasohol Competition Act, a 1980 law that prevents discrimination against the sale of synthetic fuels.

“We are writing to express concerns that oil companies are engaging in anti-competitive practices aimed at blocking market access for renewable fuels,” the senators wrote. “We urge you to investigate these allegations and, if true, whether they violate the nation’s antitrust laws.”

Grassley is the ranking member of the Senate Judiciary Committee, and Klobuchar heads the subcommittee on antitrust, competition policy and consumer rights. In addition, both senators’ home states are major ethanol producers. Iowa produced more ethanol than any other state last year, with 3.7 billion gallons coming from 41 plants, while Minnesota produced the fifth most of any state, according to the Renewable Fuels Association.

Oil groups such as the American Petroleum Institute have argued that fuels with higher-level ethanol blends damage car engines and will drive up gas prices. API asked the Environmental Protection Agency last week to lower the amount of ethanol that must be blended into gasoline in 2014, but the agency said it would not reconsider.

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