NYT Covers Fines for Non-Existent Cellulosic Ethanol

by Brian McGraw on January 10, 2012

in Blog

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A topic CEI has written about frequently gets covered in The New York Times, the bizarre requirement by the EPA that refiners spend up to $7 million on ghost “credits” from the EPA in lieu of purchasing cellulosic ethanol, which doesn’t exist:

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.

In 2012, the oil companies expect to pay even higher penalties for failing to blend in the fuel, which is made from wood chips or the inedible parts of plants like corncobs. Refiners were required to blend 6.6 million gallons into gasoline and diesel in 2011 and face a quota of 8.65 million gallons this year.

That’s a good summary. Let’s look at one specific paragraph, where the coverage borders on editorializing in support of an agency under attack by the right:

Penalizing the fuel suppliers demonstrates what happens when the federal government really, really wants something that technology is not ready to provide. In fact, while it may seem harsh that the Environmental Protection Agency is penalizing them for failing to do the impossible, the agency is being lenient by the standards of the law, the 2007 Energy Independence and Security Act.

Alternatively, it demonstrates an absurd outcome all too common within large bureaucratic agencies, where the EPA apparently lacks either the authority or willpower to do-away with what is clearly a punitive, industry specific tax.

And yes, the law as written is worse, technically the EPA could require the entire 500 million gallons in 2012 and solicit enormous daily fines to companies that are unable to comply (the legislation allows for something similar) — I’m sure that would do wonders for the economy. You foolish laypeople may think this is harsh, but really you should admire their leniency in only administering small fines for companies who are unable to purchase a product which doesn’t exist, rather than bankrupting them.

Back in reality, there is absolutely no justification for the requirements. If the EPA truly lacks the ability to make continual adjustments to the “requirements” to reflect their availability (or lack thereof), they should make this clear (they have never done so) and ask Congress to extend them that decision making power via legislation.

The rest of the NYT article is here.

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