Daily Archives: January 11, 2012
What if you passed a law that required the use of alternative fuels from particular sources to be blended with petroleum based fuels to help “break our dependence” on petroleum from “unfriendly countries” (and cut greenhouse gases). And what if, a few years later, new and abundant sources of domestic oil and gas were found, plus even more from secure allies like Canada?
Wouldn’t it makes sense to reconsider the original legislation in light of the new finds.
Oh, and one more thing … what if one of the alternative fuels mandated to be mixed with gasoline hadn’t yet materialized commercially? Would you exempt refiners or fine them?
Common sense says you exempt them. The EPA has, instead, chosen to fine them.
When the companies that supply motor fuel close the books on 2011, they will pay about $6.8 million in penalties to the Treasury because they failed to mix a special type of biofuel into their gasoline and diesel as required by law.
But there was none to be had. Outside a handful of laboratories and workshops, the ingredient, cellulosic biofuel, does not exist.
Somehow that appears to be considered the fault of the refiners. And the EPA is requiring the fines be levied and paid.
Any guess as to who will end up paying those fines?
The 2007 law requires three types of bio fuels be mixed: “car and truck fuel made from cellulose, diesel fuel made from biomass and fuel made from biological materials but with a 50 percent reduction in greenhouse gases” according to the NY Times.
But cellulosic fuel is commercially unavailable. There simply is none to be had.
Michael J. McAdams, executive director of the Advanced Biofuels Association, said the state of the technology for turning biological material like wood chips or nonfood plants straight into hydrocarbons — instead of relying on conversion by nature over millions of years, which is how crude oil originates — was advancing but was not yet ready for commercial introduction.
Of the technologies that are being tried out, he added, “There are some that are closer to the beaker and some that are closer to the barrel.”
But the requirement – and the fines – remain.
Meanwhile, time has marched on and guess what?
Mr. Drevna of the refiners association argued that in contrast to 2007, when Congress passed the law, “all of a sudden we’re starting to find tremendous resources of our own, oil and natural gas, here in the United States, because of fracking,” referring to a drilling process that involves injecting chemicals and water into underground rock to release gas and oil.
What is more, the industry expects the 1,700-mile Keystone Pipeline, which would run from oil sands deposits in Canada to the Gulf Coast, to provide more fuel for refineries, he said.
But the EPA is unmoved by that or the fact that cellulosic fuel is unavailable:
But Cathy Milbourn, an E.P.A. spokeswoman, said that her agency still believed that the 8.65-million-gallon quota for cellulosic ethanol for 2012 was “reasonably attainable.” By setting a quota, she added, “we avoid a situation where real cellulosic biofuel production exceeds the mandated volume,” which would weaken demand.
Hmmm … expert: “We’re closer to the beaker than the barrel”. Bureaucrat: “Even though the product is not commercially available, we still believe the mandate for this year is reasonably attainable.”
Yet there is nothing on the horizon for commercially available cellulosic ethanol in 2012:
One possible early source is the energy company Poet, a large producer of ethanol from corn kernels. The company is doing early work now on a site in Emmetsburg, Iowa, that is supposed to produce up to 25 million gallons a year of fuel alcohol beginning in 2013 from corn cobs.
And Mascoma, a company partly owned by General Motors, announced last month that it would get up to $80 million from the Energy Department to help build a plant in Kinross, Mich., that is supposed to make fuel alcohol from wood waste. Valero Energy, the oil company, and the State of Michigan are also providing funds.
Yet other cellulosic fuel efforts have faltered. A year ago, after it was offered more than $150 million in government grants, Range Fuels closed a commercial factory in Soperton, Ga., where pine chips were to be turned into fuel alcohols, because it ran into technological problems.
Yes that’s right folks, Government Motors is sucking up $80 mil in taxpayer dollars for a startup on a product that experts say isn’t ready for prime time and, as demonstrated by the Georgia plant, still has technical problems which apparently prohibit the commercial production of the desired alternate fuel (after it sucked up $150 mil of tax payer money).
This is ideological agenda driven madness abetted by bureaucratic stupidity. However, no one has ever claimed bureaucracies deal in reality. They’re fall back for such absurdities is process. Fining companies for not using a product that isn’t available but mandated simply underlines how decidedly absurd they can be. The EPA is on a mission. It has been directed to push that agenda by whatever means necessary.
Meanwhile the changes that should be reflected in the new reality – more abundant domestic and safe oil and gas, are being roundly ignored and their exploitation mostly hindered. And you, Mr. and Mrs. Taxpayer, are being fined and looted to push this absurd agenda.
Today’s economic statistical releases:
The MBA reports Mortgage applications are on the rebound after 3 weeks of sharp declines. Purchase applications rose 8.1% and refinance applications rose 3.3% last week. The composite index rose 4.5%.
We’re waiting, at the moment, for the release of the Fed’s Beige Book report on the economy, due out at 2PM EST.
As expected, and as polls indicated would happen, Mitt Romney won the New Hampshire primary. And he did more than win, he pretty much cruised to victory. Second place went to Ron Paul, which, actually, shouldn’t be particularly surprising. New Hampshire is a libertarian leaning state. He should have done well there. Jon Huntsman took third, which is mildly surprising, after the showing Rick Santorum made in Iowa.
And yes, the big loser was Santorum who was pretty much rejected as a candidate by New Hampshire primary voters, negating his Iowa showing. Apparently his time as Republican flavor of the week may be passing. As for Newt and Rick Perry … well as Ron Paul said, “drop out.” Gingrich and Santorum polled 9% while Perry got an anemic 1% in the Granite State.
All of the bottom 3 candidates think that the upcoming South Carolina primary will resuscitate their campaigns feeling their messages will get a better reception there than in New Hampshire. Frankly, I think Perry is fooling himself. He hasn’t done well in either Iowa or New Hampshire and he’s not polling well in South Carolina.
PPP has it broken down as Romney 30, Santorum 19, Gingrich 23, Paul 9, Perry 5, Huntsman 4. Rasmussen has it Romney 27, Santorum 24, Gingrich 18, Paul 11, Perry 5, Huntsman 2 .
If those numbers hold, and there’s no reason to think they won’t, it may be Paul who is looking for the exit poll after SC. I doubt he’ll do well in Florida. Huntsman is done and probably the next to leave, and if Perry shows as dismally as the polls show, he’ll be out before Florida’s January 31 primary.
Santorum is looking for a boost for him from what MSNBC calls the “socially conservative and evangelical Christian voters in the Palmetto State”. If he’s able to pull Rasmussen’s numbers then he’ll stay for a while. If he ends up second with a PPP spread, he’s pretty much done whether he’ll admit it or not. He’s not going to pull good numbers in Florida.
So, like it or not, Romney appears headed toward the nomination at this time. Watch for Gingrich to remain to the bitter end and be much more destructive to the GOP’s chances than the Obama campaign ever will be. Obama, after all, has to run on his poor record which means the campaign has to be careful about what issues they raise and what they don’t want raised. Gingrich is the Attila the Hun of politics, with no such limits and no qualms about pulling out all the stops even if his effort is doomed. As I said once before, it was only a matter of time until “bad Newt” showed up, and he’s here.
Meanwhile in New Hampshire, Barack Obama only managed 82% of the total Democratic vote. 10% went to write-ins and 1% of the total vote went to Vermin Supreme, the guy who claims to be a satirist and wears a rubber boot as headgear.