Archive for July, 2011

EPA madness rolls on


“What happens if the government mandates the consumption of a product that doesn’t exist? Naturally, the Environmental Protection Agency has decided to punish the gasoline refiners because they can’t buy a type of alternative fuel that no one is making. Consumers will be punished too.

The 2007 energy bill vastly increased the volume of corn ethanol that must be blended into gasoline, though it also included mandates for cellulosic ethanol.  …

The EPA set the 2011 standard at six million gallons. Reality hasn’t cooperated. Zero gallons have been produced in the last six months and the corner isn’t visible over the next six months either. The EPA has only approved a single plant to sell the stuff, … but it shut down its cellulosic operations earlier this year to work through technical snafus.

In its wisdom, Congress decided that some companies should be penalized if the targets aren’t met.  …  U.S. oil refiners that make gasoline … will end up buying six million cellulosic waivers by year’s end at $1.13 a pop. That’s $6.78 million in higher costs at the pump, in return for nothing.

That might not be much in the scheme of things, though late last month the EPA proposed a 2012 mandate that will fall somewhere between 3.55 million and 15.7 million gallons. Barring a miracle, cellulosic producers won’t hit even the lower end, refiners and the driving public will continue to pay for the mistake, and the mandate will continue to ratchet up annually. Perhaps the EPA can also find someone to tax for the lack of unicorns.”  “Cellulosic Ethanol and Unicorns