The People of America's Oil and Natural Gas Indusry

True to Our Word...

Jane Van Ryan

Jane Van Ryan
Posted January 20, 2010

API has filed suit in Tennessee over a new law that allows marketers, including owners/operators of convenience stores, to blend ethanol into gasoline. In general, the blending process occurs at fuel terminals where oil companies add ethanol to create fuels that are ultimately sold to the consumer.

"We told everybody that, if they passed that legislation, we'd have no choice but to sue," Mike Williams, the executive director of the Tennessee Petroleum Council told The Knoxville News-Sentinel. "We did exactly what we said we'd do."

API's lawsuit says the new Tennessee law contains four flaws:

  • It violates existing trademark laws stating that a manufacturer can control products all the way to the retail level. Under the new law, the fuel manufacturers must allow marketers to mix the gasoline and ethanol together in a process called "splash blending," which limits the manufacturers' ability to control the quality of their fuels.
  • It jeopardizes oil companies' ability to comply with the federal Renewable Fuel Standard, which requires them to sell a prescribed amount of ethanol. If they don't sell the proper amount, they can face significant fines.
  • It could be unconstitutional because it interferes with interstate commerce.
  • It is preempted by a federal law that allows refiners to control their brands.

A similar suit has been filed in North Carolina.

The oil and natural gas industry prides itself on delivering reliable, high-quality energy to Americans every single day. Laws that could create bottlenecks or lessen quality are not in the best interests of consumers.