BigEthanol:TheRFScanhelpmitigategas

Big Ethanol: The RFS can help mitigate gas prices! CBO: The RFS is going to cause higher gas prices.

posted at 8:41 pm on June 26, 2014 by Erika Johnsen

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Well, this is rich.

In light of the recent political turmoil in Iraq and the potential for disruption to the global oil supply, Big Ethanol would like you to know that the Renewable Fuel Standard — i.e., the mandate through which the federal government forces you to buy ethanol by forcing U.S. refiners to blend an ever-increasing volume of so-called biofuels into the country’s oil supply — is a great way to enhance our domestic energy security and mitigate the impact of any surges in gasoline prices. They even made an advertisement about it, via HuffPo:

The liberal group Americans United For Change released a new television ad Thursday tying the fight over domestic renewable fuel standards to the situation in Iraq.

The ad highlights concerns that the current violence in Iraq may cause an increase in gasoline prices. “More chaos over there means higher prices here,” the ad warns. …

The group said the ad buy is worth $400,000. The ads will run in the Washington, D.C. area this Sunday during “Meet the Press,” “Face the Nation,” “This Week,” “Fox News Sunday” and “60 Minutes.” They will also run on MSNBC, CNN and FOX News next week. In addition, the group said it’s planning an “aggressive digital media campaign.”

When Congress first enacted and later expanded the Renewable Fuel Standard in 2007, lawmakers were relying on the crucial assumption that Americans’ demand for gasoline would continue to increase ad infinitum. Instead, innovation, greater fuel efficiency, and an economic recession resulted in slackening demand for gasoline, making the RFS’s requirements and the inherent subsidy for ethanol producers therein costly and unworkable for everybody else. The EPA finally started to acknowledge this reality last year and is currently mulling over whether to relax the requirements for 2014; that’s an eventuality that the Big Ethanol lobby desperately wants to avoid, and it’s trying to capitalize on the Iraqi instability to gin up more support for the mandate that sustains the bloated ethanol industry.

We already knew that the ad’s argument that ethanol means “less pollution” is totally bogus, but as for this latest claim about the Renewable Fuel Standard being a helpful policy to put downward pressure on gas prices? Yeahhhh… no, via The Hill:

Gasoline’s price will increase up to 9 percent, and diesel fuel will rise by up to 14 percent by 2017 because of the Renewable Fuel Standard (RFS) if Congress does not repeal it, the Congressional Budget Office (CBO) said Thursday.

The CBO’s analysis estimated that, in order to comply with the increasing mandates called for under the Energy Independence and Security Act, fuel refiners would have to more than triple their use of advanced biofuels by 2017, and would have to use much more ethanol in gasoline than the 10 percent blend that older vehicles can tolerate. …

The agency predicted that the Environmental Protection Agency, which oversees the RFS, will keep the mandate levels similar through 2017, since increasing them “would require a large and rapid increase in the use of advanced biofuels and would cause the total percentage of ethanol in the nation’s gasoline supply to rise to levels that would require significant changes in the infrastructure of fueling stations.”

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Tags: biofuels, CBO, Environmental Protection Agency, ethanol, gas prices, lobby, Renewable Fuel Standard

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Iraq’sinsurgencycouldmeanasummerofpain

Iraq’s insurgency could mean a summer of pain at the pump

posted at 3:31 pm on June 12, 2014 by Erika Johnsen

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So it begins.

Sectarian violence in Iraq sent the price of oil skyrocketing on Thursday, propelling both Brent and West Texas Intermediate up more than two percent amid growing concerns about a threat to global supply.

After a delayed reaction to turmoil raging in the country, oil prices soared as open warfare between rebel forces—threatening a reconquest of the country barely a few years after U.S. forces departed—and the government spilled on to the world stage. Iraq is a member of OPEC, second only to Saudi Arabia as one of the world’s largest producers of crude.

With violence threatening Iraq’s civilian population and overwhelming the country’s security forces, a shadowy group known as the Islamic State in Iraq and Sham (ISIS) has managed to seize control of key cities including Mosul, the country’s second-largest, Ramadi, Falluja and Tikrit. Fears about global supply mounted, as reports surfaced that Russian tanks had moved into beleaguered Ukraine, sending crude on a tear and overwhelming the impact of lackluster U.S. economic data.

Iraq’s oil production is still going about its usual business as of right now, and doesn’t look like there’s any imminently huge threat of disruption. As one group of Macquarie analysts put it, however, “Although attention on Iraq has faded over the past two years, we have continued to believe that the political stability there was at best fragile. If the current situation overflows into oil-supply disruption, the total volume at risk could be material.” And as of yesterday, this was happening:

Sunni Islamist militants from the Islamic State in Iraq and the Levant (ISIS) have rapidly expanded their control of Iraq as a whole. The group is now said to be within range of overtaking Iraq’s biggest oil refinery in the city of Baiji.

The Baiji refinery can produce over 300,000 barrels of oil per day and supplies oil to the majority of Iraq. The refinery is also tasked with supplying power to Baghdad, Iraq’s capital city. Iraq is OPEC’s second biggest oil producer. …

Security sources told Reuters that the ISIS jihadists drove into Baiji, the home of the refinery, with a caravan of armed vehicles. The militants then proceeded to burn down the court house and police station, and freed masses of prisoners from jails.

It’s impossible to predict how any of this is going to play out, of course, but markets are feeling pretty edgy right about now — and as Keith Johnson at Foreign Policy posits, Americans might have largely forgotten about the Iraq war, but it’s very possible they’re about to be reminded at the gas pump:

Depending on Iraq’s ability to rally its own security forces and successfully fight the group, the uprising could also upend Baghdad’s plans to increase oil production in other parts of the country and assert control over exports in the semi-autonomous northern region of Kurdistan. All that becomes hugely important when global oil markets are looking at growth in Iraqi production as the great hope to keep the world fully supplied.

“Iraq needs to deliver; it’s as simple as that. This is not good, irrespective of whether there’s a short-term impact or not,” said Amrita Sen, an oil markets analyst at Energy Aspects Ltd, an energy consultancy in London.

“You need a lot of incremental supply increase from Iraq, which the current dynamics are saying is not going to happen,” Sen said.

However, Baghdad’s efforts to fight the militants could have knock-on effects on the huge oil fields in southern Iraq that account for the bulk of Iraqi output. Every time the Iraqi government moves troops from the south to fight militants in other parts of the country, oil companies’ operations are disrupted because of security concerns. In fact, Sen said, the increased cost of security is undermining the appeal of Iraq’s massive and easy-to-extract oil reserves.

One bright spot all of this is that the United States’ oil and gas production has lately exploded — no thanks to the Obama administration — helping to absorb some of the recent downswings in production from places like the also politically unstable Libya, Sudan, and Nigeria. Major disruptions or even just a lack of production growth from Iraq combined with the ongoing sanctions on Iran, however, could be a bridge too far to keep global gas prices below some very economically painful levels.

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Tags: domestic energy production, gas prices, Iran, Iraq, Middle East, oil, Oil and Gas Industry

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Source from: hotair

GAOtoEPA:You’regoingtohaveto

GAO to EPA: You’re going to have to release these Renewable Fuel Standard regulations sometime, you know

posted at 8:51 pm on April 14, 2014 by Erika Johnsen

Big Ethanol was appalled when the Environmental Protection Agency announced late last year that they might actually acknowledge reality by reducing the required volume of certain biofuels that refiners have to blend into the nation’s fuel supply under the Renewable Fuel Standard. Our economic slowdown combined with technological innovation and increased fuel efficiency have resulted in declining gasoline consumption in the past few years, and the annually increased volume of biofuels refiners are automatically supposed to be incorporating was running the fuel supply up against phenomenon known as the “blend wall,” the point at which the mixed fuel is no longer safe for use in most cars and trucks on the road. This phenomenon has never troubled Big Ethanol, an industry rather partial to the artificially jacked-up demand for their product the federal government mandates into existence, and the industry’s powerful lobby went into an almighty uproar over the proposed change that they’re still battling out.

Whatever decision the EPA goes with, they kinda’ need to get around to making it, since the not-yet-released 2014 standard will be applied retroactively — and as the Government Accountability Office notes in a new report, that is currently inflicting quite a bit of uncertainty on our energy sector. Via The Hill:

The Government Accountability Office report released on Monday looked at three major changes that have affected the domestic petroleum, or gasoline, refining industry, a key one being the EPA’s renewable fuel mandate. …

Since 2009 the EPA has missed its deadline to issue regulations for the renewable fuel mandate, the report states. This year has been no exception. However, the EPA did retreat on the amount of ethanol it is requiring refiners to mix into the fuel supply for the first time since the standards were established in 2007. …

“A late [Renewable Fuel Standard] contributes to industry uncertainty, which can increase costs because industry cannot plan and budget effectively, according to some stakeholders,” the watchdog said. …

The GAO notes that future consumption of petroleum products may increase through 2020 but will not return to past levels. If EPA continues to issue the fuel standards late costs may be incurred by refiners or passed onto consumer through higher gasoline prices.

Oh, look: The EPA inflicting uncertainty and extra costs onto pretty much everything it touches. Something new and different for them.

Tags: biofuels, ethanol, gas prices, Renewable Fuel Standard

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Allegedlyimaginaryethanol“blendwall”mysteriouslycostrefiners

Allegedly imaginary ethanol “blend wall” mysteriously cost refiners at least $1.3 billion in 2013

posted at 2:51 pm on April 1, 2014 by Erika Johnsen

When Congress first enacted and then expanded the inglorious ethanol subsidy that is the Renewable Fuel Standard back in 2007, lawmakers devised the rule — requiring that refiners blend certain volumes of biofuels into the country’s fuel supply or else buy credits for an exemption — based on the crucial assumption that the nation’s demand for gasoline would continue to decrease indefinitely as our economy grew. Therefore, they reasoned, the fuel supply would be able to absorb an annually increasing amount of ethanol — but because of increased fuel efficiency and slackened economic growth, that hasn’t been the case at all. For awhile now, refiners have been expressing concern over being forced to run the country’s gasoline up against the “blend wall,” i.e., the point at which the ethanol-gasoline blends are no longer safe for use in most cars and trucks.

Pish tosh!, cried the ethanol lobby, which (as you might imagine) is rather partial to the Standard and the many ways in which it has artificially jacked up the country’s demand for corn and other biofuel resources. When the Environmental Protection Agency announced late last year that it intended to revise the required volumes of biofuels in a downward direction, ethanol producers across the country immediately went into a tailspin of furious denunciations against the oh-so-rent-seeking oil industry’s supposedly illegitimate complaints about ethanol-to-oil ratios, or whatever made-up nonsense about which those greedy oil execs were raving. Even if that were as big a problem as the oil industry was making it out to be, Big Ethanol insisted about Big Oil’s motives, Big Oil is super-duper rich, and can totally handle the extra pressure without passing costs onto consumers.

Or something.

Last year’s spike in the price of ethanol blending credits cost independent refiners at least $1.35 billion, more than three times as much as the year before, according to a Reuters’ review of securities filings.

The tally, which has not been previously reported, is a conservative estimate as it includes only nine refiners that disclosed the figures. Others affected did not specify the cost of buying Renewable Identification Number (RINs), paper credits used to meet quotas for blending biofuel into gasoline and diesel. …

The review also highlights how the impact was unevenly distributed, with independent refiners CVR Refining and LyondellBasell alone shouldering more than a fifth of the cost although they only account for 2.5 percent of the nation’s daily refining capacity. …

Valero Energy Corp, the biggest U.S. refiner with 10 percent of capacity, spent about $517 million on RINs in 2013.

“We were clear that Valero could not bear that cost alone, so much or all was passed on to consumers,” said Valero spokesman Bill Day. The company estimates that it will spend another $250 million to $350 million on RINs in 2014.

Ugh. The EPA has yet to make a final decision on the RFS’s requirements for 2014 (although, yes — they will be applied retroactively), and you can count on Big Ethanol continuing to fight the potential downshift every step of the way. The fact that the Renewable Fuel Standard’s supposed “green” credentials have long since been disproved is of little consequence to them.

Tags: agriculture, biofuels, ethanol, fossil fuels, gas prices, Renewable Fuel Standard, subsidies

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BigEthanolisjustnothavingagood

Big Ethanol is just not having a good week

posted at 10:01 am on November 14, 2013 by Erika Johnsen

As I mentioned earlier this week, Big Ethanol is not happy with the Associated Press about their recent bout of detailed, investigative attention to the many ways in which federal biofuels policies directly engender aggressive environmental degradation, and they are devoting their time to disproving, discrediting, and otherwise explaining away the AP’s report like their industry’s survival depends on it — mostly because, you know, it does. Without the Renewable Fuel Standard’s mandate (which was passed in 2007, but upon which the Obama administration has relentlessly doubled down), demand for corn-based ethanol would slip by the wayside — and they certainly can’t have that.

You might not have known this, but according to Big Ethanol insiders, the Associated Press is actually in the pocket of Big Oil. Who knew? Via the Daily Caller:

The ethanol industry is firing back against the Associated Press after an investigative report that casts serious doubt on ethanol’s environmental benefits. …

“We are trying to make sure that people understand the rest of the story,” said Bob Dinneen, president of the Renewable Fuels Association. “We are going through this article point by point by point and refuting opinions with facts… And I think when the whole story is out there, people will see this for what it it.”

“It’s just another attempt by people that don’t want to reduce our dependence on oil — that are satisfied with the status quo, that want to see cheap corn — trying to pull the wool over the consumers eyes, and I don’t think it works in the end,” Dinneen added.

Oil industry representatives have denied involvement in the AP’s report, arguing that the ethanol industry is simply resorting to using them as a scapegoat for their failed policies. …

I would also suggest to Big Ethanol that they are hardly in the position to throw stones about collusion and cronyism, seeing as how they have their own pockets well-lined with Obama administration officials and lawmakers, no?

Tags: Associated Press, biofuels, cronyism, Environmental Protection Agency, ethanol, gas prices, special interests

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Vilsack:Ican’tactuallysayforsurethat

Vilsack: I can’t actually say for sure that ethanol is economical or environmental, but we’re doing it anyway

posted at 7:21 pm on November 11, 2013 by Erika Johnsen

Jazz and I have been covering what I like to call the Saga of Stupid that is the Renewable Fuel Standard and the definitely necessary, merciful push to abolish it on Capitol Hill, seeing as how the Standard is basically just another form of niche special treatment for so-called “green” energy that only succeeds in regressively jacking up food and gasoline prices and isn’t actually green.

The Associated Press has been working on a big investigation into just how not-green corn ethanol, the main beneficiary of the RFS, really is; I gather that their report has been published prematurely and pulled a couple of times but is finally scheduled for real-deal publication on Tuesday, but the AP apparently is not going to be particularly flattering for the Obama administration or their reckless, unaffordable infatuation with Renewable Fuel Standard and other subsidies — and the ethanol lobby was not pleased when they caught wind of the incoming report. Via the National Journal:

The story wasn’t out for long, but it has caused a firestorm of backlash from biofuels makers and corn producers upset at how they are portrayed. “There’s probably more truth in this week’s National Enquirer than there is in the AP story,” said the Renewable Fuels Association’s Geoff Cooper on a Monday press call. …

“Cropland is not expanding in the United States—certainly not expanding because of the RFS,” Cooper said, referring to the federal renewable-fuel standard that mandates an increasing amount of biofuels each year to be blended with the nation’s gasoline supply. Cooper insisted that corn-fueled destruction of wetlands “just isn’t happening.”

The American Coalition for Ethanol chimed in as well. “At best, the AP article is lazy journalism, but at worst, it appears purposefully designed to damage the ethanol industry,” ACE Executive Vice President Brian Jennings said in a release. “There was an incredibly reckless disregard for the truth in the handiwork of this hit-piece.”

“Hit piece”? …Mm hmm. I can hardly stress enough just how big a deal this is for Big Ethanol; a rumor that spread like wildfire last month that the EPA is considering partially rolling back the 2014 ethanol blending requirements of the Renewable Fuel Standard was bad enough, and they can hardly handle the bad press as the push for ending/downsizing the RFS gains steam in Congress.

I’ll write more about the AP investigation when it’s released, but The Hill managed to grab a snippet that is sure to fill your hearts with confidence in the Obama administration and their many regulations:

Among the morsels in AP’s probe: Pro-ethanol Agriculture Secretary Tom Vilsack doesn’t try to make the case that the fuel helps battle climate change.

“I don’t know whether I can make the environmental argument, or the economic argument,” Vilsack tells AP. “To me, it’s an opportunity argument.”

A separate Agriculture Department official told AP he’s surprised at how much fragile land has been turned into cornfields – and then got an email ordering him to stop talking.

“[T]he ethanol era has proved far more damaging to the environment than politicians promised and much worse than the government admits today,” AP reports.

He can’t actually make an environmental or economic argument — just an “opportunity argument”? …That literally makes no sense.

Tags: ethanol, farm subsidies, gas prices, lobbyists, Renewable Fuel Standard

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Source from: hotair

BusinessescirclingtheWhiteHousetolobbyfor/against

Businesses circling the White House to lobby for/against the Renewable Fuel Standard

posted at 7:21 pm on October 25, 2013 by Erika Johnsen

The relief with which some industries welcomed the news that the Environmental Protection Agency is perhaps considering backing off somewhat from the onerous requirements of the Renewable Fuel Standard was only equaled by the dismay with which it was met from ethanol’s impressively well-organized and well-monied lobby. The EPA acknowledging the reality that even they and their expansive bureaucratic powers cannot interminably cudgel the energy sector unworkable mandates is a rarity indeed, and as they are still claiming that they have yet to make a final decision on the matter, it’s time for Come One, Come All over at the White House. Via The Hill:

Officials at the Office of Management and Budget (OMB) have been busy meeting with chemical and energy companies in recent days, ahead of the expected release of new biofuel standards. …

A version of the yearly target that has been leaked to media outlets “is a jobs killer,” National Biodiesel Board spokesman Ben Evans said in an emailed statement to The Hill. …

On Thursday, the trade group and six biodiesel producers with plants across the country met with Obama administration officials to plead their case.

In othermeetingsthis week, officials from the ethanol association Growth Energy, the chemical giant DuPont, biotech firm Novozymes, Delta Air Lines and energy companies including Monroe Energy, Abengoa and PBF Energy all met with White House and EPA staffers, according to meeting records.

Ugghhh. Advocates for/opponents against almost any government regulation or initiative will claim that anything contrary to the purposes is a “jobs killer,” but the fact of the matter here is that the Renewable Fuel Standard is itself a jobs killer. Sure, there are a good few people right now who have jobs because of the RFS, producing and administrating the biofuels that American refiners are required to blend into their product at ever-increasing rates; but on net evaluation, the RFS is a drag on our total economic growth in that it distorts market signals, diverts resources from their most valuable uses, and forces Americans to pay a higher price for a type of fuel that they obviously have no desire to buy (hence, you know, the mandate). Just for good measure, I might add that evidence abounds that the RFS contributes to higher food prices domestically and abroad and that corn-based ethanol is decidedly not the environmentally friendly resource it was once supposed to be.

But you’ve all heard this from me before, and this really is a hot fight going on on Capitol Hill and across the country; for more, I’ll direct you to a smart, succinct piece from AEI’s Mark Perry revealing the RFS for what it really is, and another from ethanol lobbyist Tom Buis published at Roll Call, arguing that “only renewable fuels like ethanol can keep us from oil dependence” and save us from the caprice of OPEC. (…I consciously attempted to type that out without snorting with laughter. Nope.)

Tags: biofuels, energy, ethanol, gas prices, lobbyists, Oil and Gas Industry, Renewable Fuel Standard, special interests, subsidies

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Source from: hotair