By July 23, 2013 0 Comments Read More →

Support for RFS stokes worry for US energy policy

Confidence does not zoom when a well-placed policymaker calls the desire to jettison broken policy short-sighted.

Heather Zichal holds a powerful position. She’s deputy assistant to US President Barack Obama for energy and climate change, a policy helix the chief executive has made a priority of his second term.

At a July 18 event in Washington, DC, sponsored by the Advanced Biofuels Association and The Hill newspaper, Zichal called the current scheme of biofuel mandates “the backbone of our policy” for reducing US oil imports.

“Calls to repeal the Renewable Fuel Standard are nothing but short-sighted,” she declared.

She was discussing a policy that requires sales of one substance—cellulosic ethanol—that exists only in test quantities and more of something else—ethanol from grain—than the market can use.

The policy penalizes fuel makers and blenders for their inability to do the impossible.

It’s raising gasoline prices as refiners and gasoline blenders bid up prices of credits they need when they can’t sell enough gasoline to meet rising ethanol requirements.

And even if mandates could be met, the RFS in the peak-requirement year of 2022 would do no more to reduce oil imports than falling consumption and rising domestic production have done in just the past 2 years. Backbone, indeed.

The poorly conceived, legally offensive, and expensive RFS can’t be fixed, for these reasons:

● The Environmental Protection Agency, which Zichal said would implement the RFS law effectively, has made clear it will do no such thing.

● In response to any effort to rationalize the RFS, biofuel makers and their feedstock suppliers would ransack the political system for the protections against competition on which they depend.

● The basic approach, mandating sales of politically favored fuels, is impracticable and inevitably corrupt.

To end an uncorrectable mistake would be sensible and right.

When Zichal called the desire to do so short-sighted, she gave Americans reason to worry about folly yet to emerge from this administration on energy and climate change.



Posted in: Politics

About the Author:

The Louisiana Oil & Gas Association (known before 2006 as LIOGA) was organized in 1992 to represent the Independent and service sectors of the oil and gas industry in Louisiana; this representation includes exploration, production and oilfield services. Our primary goal is to provide our industry with a working environment that will enhance the industry. LOGA services its membership by creating incentives for Louisiana’s oil & gas industry, warding off tax increases, changing existing burdensome regulations, and educating the public and government of the importance of the oil and gas industry in the state of Louisiana.

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