From tax policy to environmental regulations to the Renewable Fuel Standard, the government is making it more difficult to do business in the boating industry, say a majority of Boating Industry readers.
That’s according to the latest Boating Industry reader survey of dealers, manufacturers, suppliers and others in the industry. We asked the readers of our print and digital products about their top issues and gathered their insights on the role of government in the boating industry. The survey was conducted by email in February.
The full results will appear in the April issue of Boating Industry as part of our annual government issue.
Fifty-six percent of readers said they are very concerned about the role of the government in their business, while another 31 percent said they were at least somewhat concerned.
A majority of respondents – 56 percent – said that government regulations have specifically hurt their ability to grow their business in the last year. They cited a variety of specific examples, but the most common impediments were environmental regulations, restricted access to fisheries, local zoning or permitting issues and tax policies that have hurt their customers.
“The State of California just keeps closing more and more areas to fishing,” said a California-based manufacturer. “The only boat launch for miles in Newport Beach is closed 6 to 8 times over the summer for other events and the push for more and more environmental restrictions is killing us.”
At the same time, local permitting challenges are making growing business difficult, a challenge cited by marina owners, dealers and manufacturers in this year’s survey.
“The time and expense of permitting basic operations and maintenance are terribly high and uncertain,” said a Massachusetts-based supplier. “Investment in growth seems impossible to achieve.”
A marina construction firm echoed that sentiment: “Regulation at the state, [federal] and in some cases local departments take at least one year for simple projects such as repairs or replacements exactly as the dock is presently built. A new facility or changes to existing facility will add anywhere from 6 months to 3 years. The typical new marina project takes 2 to 4 years to permit. Our industry is just behind getting a nuclear plant permitted!”
The most important result of all these challenges is that they are driving up the cost of doing business, and making boating less affordable. Dozens of respondents said they are concerned that government policies are making boating unattainable for the middle class.
“Environmental policies are increasing prices of boating beyond the average boaters budget,” said a Virginia dealer, in a representative comment.
Ethanol No. 1 worry
Ethanol and the Renewable Fuel Standard are clearly the top concerns among regulatory issues.
Sixty percent of respondents said they are very concerned about challenges ethanol poses to their business, while another 35 percent are at least somewhat concerned. Ethanol was also picked by the most readers – 28 percent – as their top government and regulatory issue.
In their comments, readers mentioned a number of concerns, but the most notable worry is the potential for increased damage to boat engines and other components from misfueling with E15. The result, many said, will be boaters getting discouraged and leaving the sport.
“Repair costs have been rising and the additional expense of fuel system repairs due to ethanol related has driven many from boat ownership,” said a Florida dealer. “Less boat owners means less business.”
Environmental regulations were second on the list of concerns, with 18 percent citing it as the most important issue for their business. Forty-three percent are very concerned about it and 98 percent are at least somewhat concerned – the highest total for any issue.
Tax policy was also a top concern, with 48 percent saying they were very concerned about it, and 94 percent being at least somewhat concerned. Seventeen percent said it was the most important issue to their business.
As someone who is very optimistic that higher blends of ethanol (higher octane) can benefit the auto industry, consumers and the environment, there is a pathway to protecting small engines and boat owners as well. Many of us in the ethanol industry would like to see E15 and higher blends produced through splash blending. Meaning fuel grade ethanol is simply added to E10. This helps ensure E10 for those with older cars, boats and small engines still have access to E10 and at the same time keep oil refineries from making even a cheaper gasoline blendstock.
This approach still allows higher blends of ethanol to have access to 90% of the fuel sales all the while keeping E10.
The issues here have not been proper reported in the media. Small engines, boats and older vehicles don’t have the computer systems to adjust fuel mixtures. Separating the on road issues to that off road issues (includes boats & vintage cars) would provide some clarity to the issues of ethanol blended fuels.
Today, ethanol’s two key benefits are octane and emissions. If the current level of ethanol being 10% was simply removed from our fuel supply, one should ask what would happen. Fuel prices would go up since oil refineries need to get that octane from somewhere else and this means more aromatic hydrocarbons like benzene and toluene. Here is Wichita KS., we tested every E0 being sold and found 45% more benzene and toluene in the fuel along with a total increase of 25% total aromatics. These aromatics are the key source for most fuel system issues when conducting soak testing. Most fuel hoses, plastic issues and gaskets hardening can be traced back to the varying aromatics in gasoline today.
Aromatics are also the key reason we have carbon buildup on intake valves or having clogged injectors. Consumers need to know that it’s not the ethanol causing most of the problems, it is aromatics. Aromatics in gasoline are the key reason we need detergents and the auto folks are on record that gasoline detergent use is 50% below the recommended levels. One should ask why detergents are never found in test fuels.
It is time to get the fact straight so that clear and logical solutions can be achieved.