U.S. biofuel groups court old foes

SAN DIEGO, Calif. (Reuters) — A United States biofuel lobby group said it wants to work with longtime rivals in the oil industry to fight subsidies for electric vehicles.

The oil and biofuel industries have been at loggerheads for years as they fought to sway Washington over how much biofuel should be included in gasoline and diesel.

But the animosity is waning as a growing number of electrical cars on the road threatens to cut demand for both renewable and conventional fuels.

The two groups are more aligned on many objectives than they have previously acknowledged, Renewable Fuels Association (RFA) President Bob Dinneen said, noting electrical vehicles as one area where both sides have concerns.

“We want to make sure there’s a level playing field,” Dinneen told reporters on the sidelines of an annual meeting.

The RFA sees opportunity to work on key regulatory and other issues with Big Oil, he added.

“Our objectives will align more times than not,” Dinneen said to two representatives from the petroleum industry on a panel.

Oil advocates agreed that electrical vehicles are cause for concern to the transportation fuel sector.

“(We) think we should be working to promote the longevity of the internal combustion engine,” said Chet Thompson, president of American Fuel and Petrochemical Manufacturers (AFPM), in a presentation on Feb. 21.

The group welcomes RFA and others pointing out what he described as inequities in the support the electrical vehicle industry receives, Thompson said.

Consultants CRU Group say electrical car and plug-in hybrid vehicle sales could hit 4.4 million in 2021 and exceed six million by 2025, up from 1.1 million last year.

The administration of former U.S. President Barack Obama saw electrical vehicles as part of the solution to increasing fuel economy.

The comments come as Scott Pruitt takes up his role as head of the U.S. Environmental Protection Agency. Pruitt was a controversial selection for the role by President Donald Trump, as he sued the agency numerous times when he was the attorney general of oil-producing state Oklahoma.

He is a critic of the Renewable Fuel Standard, through which the agency sets annual requirements for the volumes of ethanol and biodiesel blended with gasoline and diesel.

Trump has promised to reduce regulations to help boost drilling and manufacturing industries.

Liquid fuels like gasoline still account for 99 percent of the U.S. auto market and electrical vehicles still represent only a small proportion of vehicles on the roads, said John Eichberger, executive director of the Fuels Institute.

But that could change, he said.

Worldwide plug-in vehicles sales are growing rapidly but still account for less than one percent of U.S. car and light truck sales, according to data from EV-Volumes.com, which tracks global electric vehicle sales.

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