Ethanol Changes Would Hurt Communities Of Color

Ethanol Changes Would Hurt Communities Of Color

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By: Paula R. Glover, President and CEO of the American Association of Blacks in Energy

For communities of color, gasoline policy is probably not one of the top five issues we’re worried about. However, as president of the American Association of Blacks In Energy, I keep a close eye on policies that could adversely affect our community. Alarmingly, a group of special interests is working behind the scenes to change an important but overlooked aspect of our energy system called the Renewable Fuel Standard (RFS). If the RFS is changed, it could increase gas prices and disadvantage small businesses, disproportionately hurting communities of color.
The RFS was created to reduce our nation’s dependence on foreign oil by encouraging the production of ethanol from American corn. The gas you put into your car is part ethanol – and right now, refiners are responsible for making sure it’s there. Special interests want to shift that requirement, called the point of obligation, from themselves to the companies that store the gasoline and ship it around the country. Many of those companies are small businesses, and some of the “obligated parties” could end up being your neighborhood gas station.
The Environmental Protection Agency, or EPA, is tasked with making sure these “obligated parties” comply with the RFS program. Right now, about 200 refiners are inspected each year by the EPA. However, if the proposed changes are made, this number could increase to thousands more locations. The EPA itself has not been able to pinpoint exactly how many more “obligated parties” there would be. It’s beyond me why we would make a change like this to such an integral part of our economy when there are so many unknowns.
These proposed changes concern me because of the impacts they could have on communities of color. Over 1,000 gas stations across the country are owned by African-Americans, and in total, 40 percent of American gas stations are minority-owned. If the RFS changes, the increased complexity of EPA regulations would impose new costs on small businesses that aren’t used to complying with them. Some of them, already operating on thin margins, may choose to close rather than attempt to keep up. We should be encouraging minority business ownership, not discouraging it through increasingly complex regulation.
Additionally, compared to the average consumer, African-Americans spend more on gasoline as a percentage of their income each year. This reduction in gas stations due to burdensome regulation will reduce choices for consumers, which could raise prices and diminish access. Adding to this uncertainty is the fact that the EPA admits the proposed changes would disrupt gasoline markets. Families need stable gas prices to plan their spending each week, without interference from special interests.
In the end, these proposed changes to the RFS will benefit the few at the expense of the many. The special interests pushing these changes in Washington will profit from speculative bets they made against the current system. Among those losing out will be individuals of color who depend on gas stations for affordable fuel to get to work, and minority business owners operating on thin margins. I hope EPA Administrator Scott Pruitt and President Donald Trump make the right decision and oppose any proposal to change the RFS point of obligation.
Paula R. Glover is President and CEO for the American Association of Blacks in Energy, a non-profit professional association whose focus is to ensure that African Americans and other minorities have input into the discussions and development of energy policy, regulations, and environmental issues.

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