Big Oil Is Not Allowed to Monopolize the Blender’s Tax Credit in North Carolina
Judge Rejects Challenge to N.C. “Ethanol Blending” Law: Similar to Pending TN Lawsuit
By Tom Humphrey
The Knoxville News-Sentinel
February 12, 2010
A federal judge has rejected a lawsuit by the American Petroleum Institute that sought to invalidate North Carolina’s “ethanol blending” statute, which is similar to a 2009 law passed by the Tennessee legislature. API has also filed a legal challenge to the Tennessee law.
“This decision validates the actions taken last year by the Tennessee General Assembly to retain broad-based biofuel blending,” said Emily LeRoy, executive director of the Tennessee Fuel and Convenience Store Association, which pushed for passage of the Tennessee law.
The group also plans to file a “friend of the court” brief supporting the law in the pending Tennessee legal challenge.
The North Carolina and Tennessee statutes basically declared that gasoline retailers and wholesalers can mix ethanol with gasoline themselves rather than have major refineries do the work. Through contracts and otherwise, the big oil companies had been pushing to keep blending operations to themselves.
API, representing major oil refineries, contended in the Tennessee lawsuit that state statute runs afoul of the commerce clause of the U.S. Constitution as well as trademark law and the Renewable Fuels Standards Act, which requires the companies to sell a calculated amount of ethanol.
Similar arguments were rejected by U.S. District Court Judge Louise W. Flanagan in the North Carolina case in a decision earlier this month.
Says LeRoy: “We hope that the case in Tennessee will produce a similar decision to keep biofuel blending open to all participants.”
“While we welcome all participants and competitors into the renewable fuel marketplace, we do not believe that any business class should be able to establish a monopoly,” she said. “It is clearly in the best interest of the consumer to have multiple types of competitors engaged in blending. It brings fuel flexibility and better pricing to the public.”
