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Industry Sues EPA Over Biofuel Requirement

Posted on March 12, 2012, 5:30pm | Adam Peshek

On Friday, the American Petroleum Institute (API) filed a petition with the D.C. Circuit to review EPA's cellulosic biofuel requirements.

The 2007 Energy Independence and Security Act (EISA) requires companies that supply motor fuel to mix in specified amounts of cellulosic ethanol, a biofuel produced from plant materials. The only problem is that the fuel is not yet commercially available in the U.S. As I noted in a commentary at The Daily Caller in January:

Originally, EISA required companies to produce a combined 250 million gallons of cellulose by 2011 and 500 million gallons by 2012. Because no company has been able to produce the fuel commercially, the EPA decided to reduce the quotas to 6.6 and 8.65 million gallons. Though the new, much lower quotas are certainly an improvement, oil companies were still fined $6.8 million for not meeting their 2011 target.

Even though it is unavailable, EPA will require 8.65 million gallons of cellulosic biofuel this year or companies will have to purchase "renewable fuel credits" to meet the obligation. In other words, a tax for not using a product that does not exist. API, the oil and gas industry's largest trade group, calls the 2012 requirements "unrealistic" and what has essentially been turned into a tax on industry that "could ultimately burden consumers." In its early draft of its 2012 Annual Energy Outlook, the U.S. Energy Information Agency noted that it has become "somewhat more pessimistic" about the prospects for commercially available cellulosic biofuel sometime soon.

In their press release, API supports an EPA policy that bases requirements on "at least two months of actual cellulosic biofuel production in the current year when establishing the mandated volumes for the following year." This seems like a more reasonable approach than just picking requirements out of thin air.

As I've argued, this is not even a matter of lawmakers and bureaucrats choosing the wrong target, it is an example of lawmakers who think they can outsmart the private market and overzealous regulators put in charge of enforcing unrealistic laws.

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Spring Madness on Global Warming

Posted on May 5, 2009, 5:40pm | Shikha Dalmia

Usually, the unintended consequences of government policy appear in areas other than those that the policy is trying to address. So, for instance, government prohibited alcohol sales to cut booze consumption and a black market in alcohol popped up. Or Schwarzenegger is raising taxes and Golden State residents are beginning an exodus. Or Vermont outlawed roadside billboards to protect its pastoral vistas and large, bizarre sculptures - such a 12-foot, 16-ton gorilla clutching a real Volkswagen Beetle -- materialized adjacent to car dealers.

But when it comes to corn-based ethanol, government subsidies are accelerating the very thing they were supposed to combat: namely global warming. This is the conclusion not of some evil, knevil out-fit funded by the satanic oil industry. No, siree. This is what the saintly, truth-seeking Environmental Protection Agency just found. In a study that is hot off the press, the agency concludes that: "Demand for land on which to grow crops for biofuels can lead to deforestation and destruction of grasslands and wetlands, resulting in substantial global warming pollution."

So what is an administration that is hell-bent on foisting a cap-and-trade tax-and-spend bill that will saddle the country with trillions of dollars in new energy costs to deal with this mother of all environmental threats planning to do? Surely, it will move post haste to put the elimination of these subsidies on a high-speed-rail track in Congress, right? Wrong. That would be lunatic thinking worthy of a simple-minded, utterly credulous ingénue -- not the superior reasoning abilities of the sophisticates in the Obama administration.

Indeed, in the wake of the study, administration officials are taking immediate steps to help boost the biofuels industry. This includes the creation of an interagency task force to come up with ways to use more ethanol and other biofuels in cars and fueling stations. In addition, Energy Secretary Chu announced $786 million in stimulus funds for advanced biofuels and expansion of commercial biorefineries.

In other words, you, dear taxpayer, will pay higher energy prices to slow down global warming. And you will pay higher taxes to speed up global warming. Either way, you will be doing something for global warming.

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