I post this so that we have some comparitive numbers and note the target audience.
regards
Testimony regarding Energy Policy Act requirements for fleet purchases of alternative fuel vehicles.
Speech By: Ashland Chemical Company Senior Product Manager Paul E. Moschell
Given at: U.S.Department of Energy Public Hearing in Washington, DC.
Oct. 9, 1996
My name is Paul Moschell, and I am the senior product manager for methanol for the Ashland Chemical Company. My
company is based in Columbus, Ohio and produces methanol at our plant in Plaquemine, Louisiana. Ashland Chemical is a
member company of the American Methanol Institute.
Ashland Chemical is the largest distributor of chemicals and plastics in North America, and a leading supplier of specialty
chemicals worldwide. The company is a division of Ashland, Inc., a large energy and chemical company engaged in
petroleum refining and marketing, coal, highway construction, and oil and gas exploration and production. Ashland's major
consumer brands include Valvoliner motor oils, Zerexr antifreeze and Pyroilr performance products automotive
chemicals. As one of the largest refiners in the nation, Ashland is also a leading regional gasoline marketer, with products
marketed under the SuperAmericar and Ashlandr brand names.
Our methanol plant in Louisiana has an annual capacity of over 3.6 million barrels of methanol per year. Nationally, there
are 18 methanol plants located in 8 states that supply almost one-quarter of the world's supply of methanol. These plants
meet three-quarters of the U.S. Demand for methanol. The remaining supply comes from imports, of which Canada -- a
NAFTA partner -- supplies well over one-half. In 1995, 90% of methanol supplied to the U.S. was produced in North
America, 8% from Trinidad, Venezuela and Chile, with the remaining 2% produced in Europe, Asia and the Middle East.
Today, the largest market for methanol in the U.S. Is for the production of methyl tertiary butyl ether or "MTBE." The U.S.
Energy Information Administration estimates that 3.3 billion gallons of MTBE will be produced this year for blending in
clean, reformulated gasoline.
To meet the Energy Policy Act's goals of replacing 10% of the petroleum fuels used to power our cars, trucks and buses by
the year 2000, MTBE is making a huge contribution. According to a DOE study, nearly one-half of replacement fuel use in
the year 2000 will come from oxygenates, of which MTBE is the dominant fuel choice.
Over 30% of the gasoline sold in the U.S. today is reformulated gasoline or "RFG." The Environmental Protection Agency is
now working to establish mechanisms to provide additional areas of the country with the flexibility to join the RFG program.
We welcome this effort to provide the benefits of clean, healthful air from RFG to all americans. This effort will have the
additional benefit of giving states the ability to displace 11% of the petroleum used in gasoline with MTBE.
Turning from the RFG program to the use of methanol as an alternative fuel for vehicles, Ashland Chemical is a leading
advocate and practitioner. We recently announced that Ashland Chemical will be replacing its entire corporate fleet of
vehicles in California with methanol flexible fuel Ford Taurus sedans.
Effective with the 1997 model year that began on September 1ST, Ashland Chemical will only requisition Taurus flexible
fuel vehicles of "FFVs" for replacement vehicles for our fleet of 40 cars in California. The Taurus FFV runs on "M-85" (a
blend of 85% methanol and 15% unleaded gasoline), unleaded gasoline or any mixture of the two in the same tank.
We believe that M-85 offers an excellent fueling alternative in terms of infrastructure, cost and performance. We are not
buying these cars to meet any of the purchase requirements of EPACT oR the Clean Air Act. We are doing it because it
makes economic sense and is environmentally responsible thing to do.
California is the logical location for this initiative, since there is an extensive network of 60 public, retail methanol fueling
stations that is now serving over 13,000 methanol FFVs. These methanol vehicles are operated in federal, state and
municipal government fleets, rental car fleets, corporate fleets, and are driven by hundreds of individual consumers.
Ashland Chemical is buying methanol FFVs purely on a voluntary basis. Is there anything that the federal government could
do to support efforts such as ours? of course there are.
One of the principal impediments to alternative fuel use in this country is the inequity of federal excise tax policy. Bill
Archer, Chairman of the House Ways and Means Committee, recently referred to the "patchwork quilt" manner in which the
various alternative fuels are taxed at the pump by the federal government. On an energy equivalent basis, we pay more in
federal excise taxes on a gallon of methanol than we do on a gallon of gasoline. This simply makes no sense.
If we are to encourage the use of alternative fuels, we need a rational tax policy that creates a level playing field. Federal tax
policy shouldn't try to pick the winners and losers in the alternative fuels industry. Tax policy should encourage the use of all
alternative fuels and then get out of the way and let market competition reign.
As a member of the American Methanol Institute, Ashland Chemical plays an active role in encouraging the expanded use of
reformulated gasoline and alternative fuels.
Thank you for this opportunity present my company's views and those of the methanol industry.
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