FMN: What was your greatest disappointment?
Gilligan: Actually it’s one of my regrets. I wish I’d approached it a bit differently.
I think it was 2004 or 2005, and in that timeframe as we discussed earlier there was the concern about big-box stores selling below cost.
I had met with one of the key staffers for Sen. Tom Daschle of South Dakota who desperately wanted a national ethanol mandate. Daschle was the majority leader of the Senate, and what he had done that year since the Senate could not come up with an energy bill was commit to an energy bill himself. So we went to Daschle’s people and said look, if you will look in amendment in there barring the below cost selling of gasoline and diesel, with a simple definition of below cost, we will support a national ethanol mandate.
So we sort a struck this deal and they said Sen. Daschle can’t introduce this amendment, so can you go find a senator to introduce it and we found Max Cleland from Georgia and he introduce the amendment. But boy oh boy did we set off a bomb in the industry.
It got really crazy and it got personal and there was a lot of division between PMAA and NACS and SIGMA and API and I do still, to this day, regret how I went about that. I was probably moving too quickly and forced people to overreact or underreact and eventually had to go back to Sen. Daschle and say we can’t do it. There’s going to be too much blood and carnage about this, because the industry was very divided. I wish I’d been a little bit more strategic and I hadn’t really laid the groundwork with the other associations.
FMN: I was following RFS through a lot of that time and there was a lot of resistance and it seemed deadlocked but all of a sudden the deal was done. How did that come about?
Gilligan: Four letters—MTBE. The law required reformulated gasoline to have an oxygenated at the time, and there were only two: ethanol and MTBE. The refiners wanted to get rid of MTBE as quickly as possible, and the only way to do that was to remove that oxygenate mandate which the ethanol industry was not the mood to let happen. So basically, the refiners went to the ethanol guys and said we will agree to blend X gallons of ethanol if you agree to get rid of the oxygenate mandate.
One of the complaints from some refiners today is that this is not fair, I’m an obligated party and I have to blend this stuff and we have petroleum marketers out there blending and they are not out obligated. Not to be a smart alec, but I would say look, we didn’t volunteer to do this you guys did. You guys agreed to do all this blending and we were not even allowed in the room when it was discussed. It was strictly the refiners and the ethanol industry that made the first deal.
But the first deal in 2005 wasn’t bad. It was really reasonable and we would not be having the blend wall issues with that one. When the Democrats took over in 2006 their view was anything the Republicans can do on renewable fuels we can do better. So they went back then and expanded the whole mandate in a very significant way, which really is the source of the problem
FMN: What would you say to the members of the association as you leave office and as Rob takes over?
Gilligan: First, I would like to tell them how much I respect what they have to do to make their companies profitable in probably the most competitive business you can imagine. I have an immense respect for people who have succeeded and continue to succeed in this business, and it certainly not getting it easier.
My message would probably be to get out there and be more politically active on the local level. Get to know your state legislators and your congressmen if you can. Send your local congressman a donation for heaven’s sake. Go to a town hall meeting and give a donation, and start building that rapport because that person makes a lot of decisions that affect your business.
It frustrates me when I encounter so many members who are detached from their local political universe. I don’t want to get in politics; it’s not my thing. But you have to get involved with politics because your business is at stake. Do not be indifferent to local political races get involved and be heard.
One of the old sayings is it doesn’t matter if you know your member of Congress, it matters if he or she knows you. And that is absolutely the truth. As consolidation occurs and our industry gets smaller, it’s even more important that you build those relationships and get involved.
