DEROY MURDOCK COLUMN, 7-15-12: EPA, WHY FINE OIL FIRMS OVER FANTASY BIOFUEL?
Published: July 15, 2012 8:00AM
Why does America's economy feel like an SUV
running on fumes? The Obama administration's laughably rigid enforcement of a
Baby Bush-era ethanol mandate typifies today's regulatory climate. When Uncle
Sam governs with a tire iron in his hand, U.S. companies wisely pull off the
road and pray for new management.
The
Environmental Protection Agency has slapped a $6.8 million penalty on oil
refiners for not blending cellulosic ethanol into gasoline, jet fuel and other
products. These dastardly petroleum mongers are being so intransigent because
cellulosic ethanol does not exist. It remains a fantasy fuel. EPA might as well
mandate that Exxon hire leprechauns. So far this year, just as in 201l, the
supply of cellulosic biofuel in gallons totals zero.
"EPA's
decision is arbitrary and capricious. We fail to understand how EPA can
maintain a requirement to purchase a type of fuel that simply doesn't
exist," said Charles Drevna, president of American Fuel &
Petrochemical Manufacturers, the Washington-based association representing the
oil-refining industry.
President George W. Bush idiotically signed
the Energy Independence and Security Act of 2007. Beyond prohibiting Thomas
Edison's groundbreaking incandescent light bulb by 2014, the act's renewable
fuel standard (RFS) mandated cellulosic ethanol. Under that standard, refiners
had to blend 6.6 million gallons of cellulosic ethanol in 2011. Although this
substance is not extant, EPA then demanded to see 31 percent more of it. This
year's quota is 8.65 million gallons. Somehow, EPA expects cellulosic ethanol
to leap magically from test tubes into storage tanks.
Bush
and President Barack Obama have pumped some $1.5 billion in grants and
guarantees into converting cellulosic ethanol from dream into reality. As
Thomas Pyle of the Institute for Energy Research reports, Team Obama handed a
$105 million loan guarantee to POET, a leading U.S. ethanol producer, to create
cellulosic fuel. (The South Dakota-based firm turned it down.) Last September,
Abengoa Bioenergia scored a $134 million loan to build a Kansas cellulosic
factory. Last August, Obama gave the
Navy $510 million to develop biofuels for the U.S. armed forces.
Way back in 2010, some 70 percent of fantasy
fuel was supposed to spring from Cello Energy in Alabama. Unfortunately, in
2009, a jury determined that Cello falsified its production capacity. Cello
went dark in October 2010 when it filed for bankruptcy.
The National Academy of Sciences predicted
last year that by 2022, EPA's mandated cellulosic supplies would not materialize
"unless innovative technologies are developed that unexpectedly improve
the cellulosic biofuels production process." In other words, if you don't
build it, they will not come.
The oil
refiners absorbed all of this and chose, at first, to play nice. The
fuel-manufacturing association and the American Petroleum Institute petitioned
EPA in February 2011 and, again, on Jan. 20, 2012 -- this time joined by the
Western States Petroleum Association. As the administration gave labor unions
and entire states waivers from the Affordable Care Act, the refiners asked for
waivers from the RFS mandate.
Fully 15 months after the first petition and
four months beyond the second, EPA administrator Lisa Jackson finally rejected
the refiners' appeals, reaffirming that they must obey this regulation -- never
mind that they more easily could defy gravity. "We thank you for your
interest in these issues," Jackson's May 22 letter cheerily added.
Thus,
on June 11, the fuel manufacturers (AFPM) and Western States Petroleum Association
sued EPA in D.C. Circuit Court. The plaintiffs hope that a federal judge will
blend some sanity into a scenario that resembles the work of Salvador Dali.
Rather than focus on expanding operations and
creating jobs, lawful American companies now must spend money to sue the
federal government for relief from unobservable rules. This fact demonstrates
how boneheaded and bullheaded Washington has become. Even worse, business
people beyond the oil industry watch this charade and wonder when the regulatory
tumbrels will roll by for them.
Washington's unyielding, heavy-handed and
nonsensical behavior nonetheless may obscure a sliver of silver lining. The
Bush-Obama administration indeed has invented a hybrid fuel: cellulosic ethanol
is one-half industrial policy and one-half comedy routine.
(Deroy Murdock is a columnist with Scripps
Howard News Service and a media fellow with the Hoover Institution on War,
Revolution and Peace at Stanford University.)
"Pete" Landry...........comments welcome ..............at way2gopete@yahoo.com
