Oil Watchdog’s parent organization today sent a letter to Chevron CEO David O’Reilly that accused the company of blocking gas stations from selling renewable motor fuels, even as it claims new green credibility. As crude oil prices surge and gasoline prices continue spiking toward new records, this is a whole new level of "greenwashing." (UPDATE, Thursday afternoon: Chevron responds, and FTCR answers back.)
Check out the gas station contract language that, by forcing stations to put in new sales areas and tanks, prices green fuels out of the commercial market. And here are photos of gas station ‘canopies’ and underground tanks that illustrate the problem.
In March 2006, O’Reilly told a Senate hearing, “[O]f our 9,300 [gasoline] stations, 8,900 are independently operated and they are free to deploy E85.” In fact, Chevron’s contracts with retailers make it impractical, and in most cases impossible, for them to sell alternative and renewable fuels. Thus Chevron’s long-touted investment in a large biofuel plant set to open April 15 on Galveston Bay will produce a fuel that Chevron now actively keeps off the market.
Auto executives who met with President Bush Tuesday to tout biofuels said there are now more than 6 million flex-fuel vehicles in the United States, while the country’s 170,000 gas stations have only 2,000 pumps for E85 or biodiesel. As Oilwatchdog’s research shows, Chevron and other major oil companies, which have similar practices, are to blame for this retail scarcity.
The letter to Chevron said:
"Mr. O’Reilly, certainly you are aware that the motor fuel contract and Image Agreement that all independent Chevron dealers must sign contain provisions inserted by your legal department that make it all but impossible for a Chevron dealer to deploy E85 or biodiesel. The same holds true for other oil companies with branded stations."
Gas station owners would have to spend up to $250,000 to satisfy Chevron’s contract requirements, even if they had the space to install new underground tanks, which most stations do not. The company’s contract restrictions mean that its recent embrace of renewable fuels is little more than a public relations greenwashing.
The letter also cited restrictions imposed by Chevron’s billing systems, which in practice would require the installation of a separate credit card station for alternative fuels.
The letter describes practical options:
“Numerous options would allow alternative fuel(s) to be offered by many independent Chevron dealers. One would be to substitute biodiesel for the current diesel. Another would be to substitute an alternative fuel for Chevron midgrade, the lowest-selling grade.
“Independent dealers could also install a blending system that would blend regular and supreme to create the midgrade gasoline. This would free the underground storage tank and dispenser hose currently supplying the midgrade product for either biodiesel or E85.”
If Chevron and other oil companies meant what they’re belatedly saying about renewable energy, they would be offering incentives to gasoline dealers willing to sell E85 and biodiesel. Instead, Big Oil is still using its dealer contracts to ensure that renewable fuels won’t cut into its market for petroleum fuels.