EPA Mandates Hurt Energy Companies And Consumers

See Dump ethanol mandate by Robert L. Bradley, For the San Antonio Express-News : October 11, 2013. Robert L. Bradley Jr. is CEO of the Institute for Energy Research in Houston and an adjunct scholar of the Cato Institute in Washington, D.C. Excerpts:

"This year the EPA ordered refiners to add 13.8 billion gallons of corn-based ethanol into gasoline, and next year that figure is expected to rise to 14.4 billion gallons. EPA also has mandates for other renewable fuels, some of which are not ready for prime time.

Consider, for example, cellulosic ethanol. For years the EPA has commanded refiners to use millions of gallons of this advanced biofuel despite the fact that the first commercial quantity —amounting to 20,000 gallons — was produced in 2012 according to EPA's own data. But that didn't stop the agency from levying steep fines on refiners. In 2010 and 2011, the oil industry paid more than $6 million for failing to use a nonexistent fuel.

In a court ruling, the U.S. Court of Appeals in Washington told the EPA that its cellulosic ethanol mandate should be based on reality, not “aspirations,” and the agency lowered the phantom fuel mandate from 8.65 million gallons in 2012 to six million gallons in 2013. Again EPA's data show a total of only 86,000 gallons have been produced this year.

The corn ethanol program suffers from a different problem. There is plenty of ethanol, but because gasoline demand has declined, much of it isn't needed. By law, refiners can only add enough ethanol to the gasoline pool to make E10, a blend of 10 percent ethanol and 90 percent gasoline.

With this year's higher ethanol mandate, refiners have had to purchase ethanol credits called RINs (Renewable Identification Numbers). The RINs have proven to be a huge expense."

"...last year, the agency granted a “partial waiver” allowing the sale of E15, a fuel containing up to 15 percent ethanol."

"...gasoline containing ethanol concentrations higher than 10 percent can lead to engine failure."

The mandates "..also is linked to higher food and gasoline prices, higher feed prices for cattle and poultry producers, and unrest in the Middle East."