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Fed Up With Ethanol, Boaters and Bikers Search for Alternatives

August 13, 2013 by Leave a Comment

One of the many problems with the Renewable Fuel Standard (RFS) is that it requires refiners to blend increasing amounts of ethanol into motor fuel, even though ethanol can damage engines. Gasoline blended with even as little as 10 percent ethanol can accelerate engine failure in boats, motorcycles, lawnmowers, and other small engines.

Musa Agil has firsthand knowledge of this problem. Agil, who operates two independent gas stations in Wilmington, North Carolina, started selling ethanol-free gasoline a few years ago. Since then, he says he’s gained a loyal base of customers who are willing to drive across the county to buy his product, even though it is more expensive than conventional gasoline (E10).

“They’re willing to pay it to protect their boats, old cars, motorcycles, landscaping equipment,” Agil said in an interview with the Wilmington Star-News. “They just don’t want that crappy gas going into their engines.”

One of Agil’s customers, Capt. Allen Cain, said he switched his boat to ethanol-free gasoline about three years ago after his friends started having problems with E10.

“Ethanol is bad for your boating outboards and it’s bad for your fuel lines because ethanol will eat through the fuel lines and mess them up, so it’s worth it in the long run to use non-ethanol fuel,” Cain said.

Keith Beasley, owner of Thomasville Lawn and Garden in Thomasville, North Carolina, estimates that fuel problems related to ethanol account for between 75 and 80 percent of his business.

“[Ethanol] being from a corn base it is gritty,” he explains. “Inside a carburetors there are a lot of small tiny passages that the grit will just get stopped and can’t go through.”

Despite the harmful effects of ethanol, the Environmental Protection Agency (EPA) approved last year production of gasoline that contains up to 15 percent ethanol. As AAA points out, use of E15 is “expressly prohibited” for boats, motorcycles, power equipment, lawnmowers, and off-road vehicles.

E15 also poses problems for the 95 percent of cars in America that are not certified to use it. Several automakers have said their warranties will not cover claims related to improper E15 use. In response, AAA has called for a suspension of E15 sales, citing “consumer confusion and the potential for voided warranties and vehicle damage.”

Passed by Congress in 2005 and expanded in 2007, the RFS requires refiners to blend 36 billion gallons of biofuels into gasoline by 2022. Last week, EPA increased the 2013 mandate to 16.55 billion gallons, most of which will come from corn-based ethanol. As the federal mandate continues to rise, ethanol will only cause more problems for boaters, bikers, and anyone who likes to keep a nice lawn.

IER Policy Associate Alex Fitzsimmons authored this post.

Filed Under: Products and Power, Renewable Fuel Standard, Threats Tagged With: , , , , , ,

In the Pipeline: 8/12/13

August 12, 2013 by Leave a Comment

All future measurements should be in fruit-based units.

Forbes (8/10/13) reports: “There’s much screaming and shouting from the usual suspects about the new radiation leak discovered at Fukushima, the stricken nuclear power plants in Japan. What they’re not telling you is that the radiation leakage is around the same as 76 million bananas. A fact which should help to put it all into some perspective. Here’s Greenpeace: Environmental group Greenpeace said Tepco had ‘anxiously hid the leaks’ and urged Japan to seek international expertise. ‘Greenpeace calls for the Japanese authorities to do all in their power to solve this situation, and that includes increased transparency…and getting international expertise in to help find solutions,’ Dr Rianne Teule of Greenpeace International said in an e-mailed statement. Not that Greenpeace is ever going to say anything other than that nuclear power is the work of the very devil of course. And the headlines do indeed seem alarming.”

It takes over 200 days to get a permit to drill on federal lands in the Land of the Free.

The Telegraph (8/9/13) reports:  “David Cameron’s plans to kick-start shale gas fracking faced a fresh setback after the environmental regulator said energy companies could face a six month wait to secure permits despite a government pledge to cut the process to less than a fortnight. In a development that will be welcomed by those concerned about shale gas, the Environment Agency (EA) said the ‘current level of public interest’ in fracking meant that the permitting process was likely to be extended to allow for more consultation. In June, the Treasury pledged the government would take a series of measures ‘designed to kick start the shale gas industry in the UK’ including plans for the EA to ‘significantly reduce the time it takes to obtain environmental permits for exploration’. It said the EA would ensure shale gas permits which currently take a varying length of time would be issued within a “standard 13 week period” by September and then “within 1-2 weeks” by February.”

How many of the assumptions underlying the environmentalist view of the world depend on global warming and scarcity? What are they going to do when both are discredited?

Climate Depot (8/9/13) reports: “Another major European media outlet is asking: Where’s the global warming? Moreover, they are featuring prominent skeptic scientists who are warning of a potential little ice age and dismissing CO2 as a major climate driver. And all of this just before the release of the IPCC’s 5AR, no less! The August 7 print edition of the Danish Jyllands-Posten, the famous daily that published the ‘Muhammad caricatures’, features a full 2-page article bearing the headline: ‘The behavior of the sun may trigger a new little ice age’ followed by the sub-headline: ‘Defying all predictions, the globe may be on the road towards a new little ice age with much colder winters.’ So now even the once very green Danish media is now spreading the seeds of doubt. So quickly can ‘settled science’ become controversial and hotly disputed. The climate debate is far from over. And when it does end, it looks increasingly as if it’ll end in favor of the skeptics. The JP writes that “many will be startled” by the news that a little ice age is a real possibility. Indeed, western citizens have been conditioned to think that nothing except warming is possible. Few have prepared for any other possibility. In its latest 2-page report, the JP now appears to tell its readers that our views on climate science have to be much more open minded and unshackled from the chains of dogmatism.”

The ethanol industry complains of monopoly persecution, but when you talk to customers, they’ve got a very different perspective on monopolies and mandates.

The Star News Online (8/11/13) reports: “For most folks, it’s the price of gasoline that matters. But for a vocal minority, it’s what’s in the gasoline that really matters. Or, to be more precise, what isn’t – specifically ethanol. Several years ago, Musa Agil looked to capitalize on that demand and make his mark in the Wilmington market by starting to sell ethanol-free gasoline at his pair of independent gas stations – Wrightsville Country Store and Masonboro Country Store…Six years later, Agil has a loyal customer base that drives from as far away as southern Brunswick County to fill the tanks of their cars, boats, motorcycles and lawn equipment with his ethanol-free fuels – which he now sells in three grades. The gasoline is a hot seller even though it can cost 30 to 40 cents more per gallon than the fuels that are blended with ethanol.”

The Journal mischaracterizes these people. Most of them are really lobbyists for companies, trade associations, or law firms with interests and issues before the Commission. They want to make sure that the new boss likes them. In short, they are part of the problem.

The Wall Street Journal (8/8/13) reports: “As former commissioners of the Federal Energy Regulatory Commission, we object to your July 30 editorial ‘Ron Binz’s Rules for Radicals’ criticizing Ron Binz, the president’s nominee to chair the FERC, and implying that the FERC is pursuing an agenda unconstrained by law or national policy. Mr. Binz is criticized for helping draft, at his governor’s request, provisions of new utility legislation in Colorado. The law requires utilities to submit regulatory plans so that coal plants comply with expected Environmental Protection Agency regulations. Mr. Binz’s commission implemented the law, issuing a balanced decision that closed older, heavier-emitting coal plants while outfitting newer coal plants with emissions controls.”

Filed Under: Blog, In the Pipeline Tagged With: , , , , , , , , , , ,

E85 Can Break the Bank, but Not the Blend Wall

August 12, 2013 by 3 Comments

The Environmental Protection Agency (EPA) recently increased the amount of ethanol refiners must blend into gasoline under the Renewable Fuel Standard (RFS), despite repeated warnings that the U.S. cannot handle higher ethanol concentrations.

While the RFS requires blending increased amounts of ethanol into gasoline, most cars are certified to run on gasoline that contains no more than 10 percent ethanol (E10). Breaching this “blend wall” would force refiners to decrease production and increase exports, resulting in higher gas prices for Americans.

The Renewable Fuels Association is touting a new report that claims to offer a solution to the approaching blend wall. The study, conducted by economists at Iowa State University, claims that increasing production of E85 (ethanol that contains up to 85 percent ethanol) would allow refiners to meet rising federal mandates without increasing the ethanol content of conventional gasoline.

Unfortunately for ethanol advocates, the study is based on several dubious assumptions about consumer demand for ethanol and E85. When these assumptions are more closely aligned with reality, the argument for E85 as a solution to the blend wall falls apart.

The most serious flaw with the study is that it relies on government regulation to keep the price of gasoline artificially high. As the authors admit:

“However, this expanded ability to use ethanol will not occur under existing policies unless EPA increases mandates significantly above the E10 blend wall because high RIN prices is the only current policy tool that provides the necessary incentives to increase the distribution capacity and demand for E85.”

To comply with the RFS, refiners can either blend the required ethanol volumes or purchase Renewable Identification Numbers (RINs). The problem, as we have explained before, is that RIN prices spiked from $0.07 cents at the beginning of the year to over $1 in March and $1.32 in July. This increases compliance costs on refiners, which puts upward pressure on prices at the pump. By the authors’ own admission, high RIN prices—and by extension high gas prices—are necessary to make E85 economical.

Another flaw with the study is that it depends on an unrealistic drop in the price of E85. The authors claim that E85 selling at $2.00 per gallon would “attract quite a lot of attention.” They fail to point out that E85 isn’t selling anywhere close to that price point. According to AAA’s Daily Fuel Gauge Report, E85 currently costs about $2.86 per gallon.

This figure does not even account for the fact that E85 contains about 33 percent less energy than conventional gasoline. The BTU-adjusted price of E85 is currently $3.76 per gallon, which is significantly higher than regular unleaded gasoline. Stating the obvious, the authors explain that “low levels of E85 consumption should be expected when E85 is not priced to save consumers money.”

Price is not the only factor drivers consider when purchasing fuel; convenience also plays an important role. The authors point out that only 2.7 percent of retail gas stations sell E85, most of which are concentrated in the upper Midwest. Millions of drivers who own flex fuel vehicles (the only cars that can run on E85) do not even live within ten miles of one of these stations. As the authors admit, this geography limits the already small pool of drivers who would be inclined to purchase E85 if it were more competitively priced.

Far from providing a “workable and economic pathway” for refiners to comply with the RFS, the ethanol lobby’s solution to the blend wall is a recipe for higher energy prices. Increasing E85 production at the expense of conventional gasoline would only further reduce gasoline demand, which is part of the reason the blend wall is even an issue. The solution is for Congress to repeal the RFS.

IER Policy Associate Alex Fitzsimmons authored this post.

Filed Under: News, Products and Power, Renewable Fuel Standard, Threats Tagged With: , , , ,

Biofuels: Reality vs. Federal Mandates

August 9, 2013 by 1 Comment

One of the most absurd aspects of the federal government’s energy policy is the Renewable Fuel Standard’s mandate for cellulosic ethanol volume. As we have explained on these pages, ethanol mandates drive up the price of food for no reason. We also wrote, “EPA is incredibly forcing refiners to pay a fine for not hitting cellulosic ethanol targets that even the EIA projects will be impossible, and even though in 2011 there was no evidence that any cellulosic ethanol was available commercially to make it possible for the refiners to comply with the regulation.”

Well, it’s two years later, how have things changed? The EPA based its cellulosic ethanol mandate for 2013 on two particular plants, one of them being  a Kior plant based in Columbus, Mississippi. Yet unfortunately for refiners—who will face penalties for not obeying the mandate—Kior missed its second-quarter production forecast by a whopping 75 percent. Here are the Bloomberg story’s details of the sordid affair:

Kior Inc. (KIOR), a producer of transportation fuels from biomass such as wood waste and non-food crops, fell…as production at its first commercial plant was 75 percent below its forecast.

…

The company shipped more than 75,000 gallons (284,000 liters) of fuel from its Columbus, Mississippi, plant in the second quarter…Kior said in May the facility would produce 300,000 gallons to 500,000 gallons. Revenue in the quarter was $239,000, about 12 percent of the $1.93 million average of five analysts’ estimates…

The Columbus plant opened in October, the first commercial site making cellulosic fuel in the U.S. [Bold added.]

At the same time the EPA is mandating refiners to use more cellulosic ethanol than physically exists, it is also mandating that they blend more total ethanol (including corn-based) than is feasible, because of the slower than expected increase in total gasoline usage. (This had led refiners to hit the so-called “blend wall,” driving the price on renewable credits to record highs.)

It’s one thing for the government to levy costly and inefficient mandates on industry, but it comes out of a Kafka novel to mandate renewables standards that are literally impossible to achieve. The fact that EPA is so wildly off in its forecasts—so that it unintentionally asked industry to do the impossible—casts doubts upon the whole enterprise of renewables mandates.

 

 

Filed Under: Products and Power, Renewable Fuel Standard, Threats Tagged With: , , , , ,

In the Pipeline: 8/9/13

August 9, 2013 by Leave a Comment

Congress should take this as a teachable moment and mandate that the plant generate all its electricity from wind or solar and that Congress will rely on no other powerplants.  I suspect the Republic would be a lot safer if staffers and Members had to get by on a few hours of electricity a day.

The New York Times (8/8/13) reports: “As part of the climate change agenda he unveiled this year, President Obama made a commitment to significantly reduce the federal government’s dependence on fossil fuels. The government, he said in a speech in June at Georgetown University, ‘must lead by example.’ Some critics say officials at the plant are choosing to burn dirtier fuel as a political statement. But just two miles from the White House stands the Capitol Power Plant, the largest single source of carbon emissions in the nation’s capital and a concrete example of the government’s inability to green its own turf. The plant, which provides heating and cooling to the sprawling Capitol campus — 23 buildings that include the Library of Congress, the Supreme Court and Congressional office buildings, in addition to the Capitol building itself — is operated by Congress, and its transition to cleaner energy sources has been mired in national politics for years.”

Do you ever get the feeling the NOAA crew is rooting for destruction?

My Fox New York (8/8/13) reports: “This Atlantic hurricane season may not be quite as busy as federal forecasters once thought, but they still warn of an unusually active and potentially dangerous few months to come. The National Oceanic and Atmospheric Administration updated its hurricane season forecast Thursday, trimming back the number of hurricanes they expect this year to between six and nine. That’s a couple less than they predicted back in May. The forecast calls for three to five of those hurricanes to be major, with winds greater than 110 mph. The updated forecast also predicts 13 to 19 named storms this year. Both of those predictions are just one less forecast three months ago.”

Let’s talk about that jobs “blip.”

The Energy and Commerce Committee (8/8/13) reports: “If the president is indeed committed to reducing unemployment, he should swiftly pivot toward American energy production. Data from the Labor Department’s Bureau of Labor Statistics illustrate that the U.S. oil and gas industry continues to be a bright spot in America’s economy. The Energy Information Administration reported today, ‘From the start of 2007 through the end of 2012, total U.S. private sector employment increased by more than one million jobs, about one percent. Over the same period, the oil and natural gas industry increased by more than 162,000 jobs, a 40 percent increase.A recent study commissioned by the American Petroleum Institute found the oil and gas industry supported a total of 9.8 million American jobs in 2011, including over 600,000 jobs created in just two years. While the country still struggles with high unemployment, energy producing states like North Dakota and Texas are experiencing job growth.”

 

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For you Alaskaphiles out there…

Energy Intelligence (7/29/13) reports: “Doyon, one of the largest private landowners in the US, has spent the last three years conducting additional seismic surveys and analyzing test results from a well targeting natural gas that was drilled in the summer of 2009. That well, Nunivak #1, located 50 miles west of the city of Fairbanks, showed signs of oil generation below 7,000 feet, and Doyon believes that the basin may hold more than 1 billion barrels of oil. ‘The initial look was really for gas, but it clearly has turned to oil as a result of the well we drilled in 2009,’ Jim Mery, Doyon’s senior vice president of lands and natural resources told Oil Daily in an interview. ‘We see an opportunity to change the paradigm about oil development in this state.’ The basin has the advantage of accessibility in a state where the road system and electrical grid only reach 40% of the land area. The drilling site for the second well, Nunivak #2, is near Alaska’s main north-south railroad and highway corridor and roughly 65 miles from both the state’s largest refinery and the Trans-Alaska Pipeline System.”

Filed Under: Blog, In the Pipeline Tagged With: , , , , , , , , , ,

In the Pipeline: 8/8/13

August 8, 2013 by Leave a Comment

I bet you did not know that Commissioner Binz is the hand-picked successor of the current FERC chairman, who himself is hostile to coal, natural gas, and anything, really, that works.

Complete Colorado (8/7/13) reports: “As Ron Binz campaigns to be confirmed as the head of the Federal Energy Regulatory Commission, much of the emphasis has been on his position as an activist for what he considers to be low or no carbon energy sources, predominantly Big Wind. (Forget the fact that wind requires an enormous amount of carbon emissions in the manufacturing of gigantic wind turbines.) But Binz’s no carbon advocacy is hypocritical. While Binz now advocates for lowering carbon emissions, he was instrumental in shutting down Colorado’s lowest carbon emitting power source, the Fort St. Vrain nuclear plant, which eventually converted to natural gas – a technology he now calls “dead end” when it comes to carbon emissions. As head of the Office of Consumer Council (OCC), Binz successfully argued before the Public Utilities Commission (PUC) that the power plant did not work correctly and that the shareholders of the company running the plant must pay for the capital costs rather than customers using the electricity.”

Musk to market: We don’t need no stinking Generally Accepted Accounting Principles. Our friend Matt Yglesias (and we use the term loosely) points out that Tesla actually lost money this quarter. Of course, Matt is fine with that (and apparently so is Wall Street).  

Slate (8/7/13) reports: “Tesla somewhat unexpectedly earned a modest profit in the first quarter of this year, which naturally raised expectations for the following quarter. And in a letter to shareholders pegged to today’s earnings release, CEO Elon Musk claims victory: ‘While profits were still modest in absolute terms and not our primary mission, net income increased by 70% from last quarter, driven by record Model S deliveries and a significant improvement in automotive gross margin.’ Delve into the report, however, and this turns out to be not quite as simple as it seems. Publicly traded companies are obliged to report earnings in terms of what are known as Generally Accepted Accounting Principles (GAAP) and that 70 percent increase in based on a non-GAAP measure.”

Teachable moment for Governor Hickenlooper: Sometimes those crony capitalists don’t live up to their end of the bargain.

The Denver Post (8/6/13) reports: “The General Electric Co. has abandoned plans for a $300 million solar-panel factory in Aurora and instead struck a deal with the largest U.S. solar-panel maker, First Solar Inc. GE is giving technology developed by a Colorado startup it bought to First Solar in exchange for 1.75 million shares in the Tempe, Ariz.-based company — worth about $82 million based on Tuesday’s closing share price. The Arvada research center — where the technology was created and which was formerly PrimeStar Solar — will be closed, with 50 people losing their jobs, GE spokeswoman Lindsay Thiele said.”

Watch Whatley work. Keystone opponents will not like this interview.

E&E News (7/31/13) reports: “Well, look, the environmental groups that supported the President and opposed this pipeline are not going to be satisfied no matter what decision is made. If the President says yes, no matter what excuses or reasons that he were to deliver to it, straight out they oppose this pipeline, they do not want to see the oil sands developed, and there’s not really going to be any placating them. But I think for the average American voter and for the folks that support this pipeline, and also support a clean healthy environment, the fact that this will be the safest pipeline ever done, it won’t contribute substantially to carbon emissions throughout the globe, and it’s going to help reduce gasoline prices and create jobs here in the United States, those are the important factors the President needs to take into account.”

Filed Under: Blog, In the Pipeline Tagged With: , , , , , , ,

In the Pipeline: 8/6/13

August 7, 2013 by Leave a Comment

Do you think the protesters drove there?

Reuters (8/4/13) reports: “Police arrested more than 200 demonstrators for trespassing at Chevron Corp in the California city of Richmond on Saturday to mark the one-year anniversary of a massive refinery fire and to protest a proposed Keystone XL tar sands pipeline. The arrests came as a throng of sunflower-carrying picketers chanted, ‘Hey hey, ho ho, fossil fuels have got to go,’ as people of all ages walked onto Chevron’s property to draw attention to a growing movement against fossil fuel. Police Captain Mark Gagan said the arrests, all peaceful, included three people in wheelchairs and demonstrators as young as 18 years old. Media reports said most of those arrested were cited and released. Environmentalist Bill McKibben, who is leading a call for using only renewable energy, was one of the first to be handcuffed.”

This is why FERC and Binz matter.

The Miami Herald (8/5/13) reports. “The windswept prairies of the Midwest are undergoing an energy transformation the electric grid can’t handle. Wind turbines tower over rural vistas in the heartland, where the clean energy source is becoming increasingly popular with utility companies that face state-mandated renewable energy standards. Unfortunately, the nation’s aging power grid is hampering those efforts. At the end of last year, installed wind-generation capacity totaled 60 gigawatts nationwide – 5 percent of the nation’s production capacity – according to data from the U.S. Energy Department’s National Renewable Energy Laboratory. Another 135 gigawatts of potential wind production awaits development and connection to the grid, according to industry data.”

Fancy that, we can drill our way out of the problem.

Energy Guardian (8/6/13) reports: “The price of domestic oil has steadily risen this year to about the same as that of imports. Yet the price of a gallon of gas has stayed well below the record of $4.11 a gallon set in the summer of 2008. Why? U.S. pump prices tend to rise and fall based on the world spot price, reflected in the North Sea Brent crude benchmark set in London. The good news for consumers has come because Brent prices have been held in check by stronger U.S. output and better transportation to refiners, according to the Energy Department.”

Attack energy production, modern life, and our standard of living as much as you want, but if you use global warming to threaten our ability to grill real meat? You’ve crossed a line, this is blasphemy.

Bloomberg (8/5/13) reports: “The world’s first beef burger created from stem cells has a texture that’s closer to cake than steak. The burger, fried in a public unveiling in London today, lacks the fattiness of regular meat and could be described as an ‘animal-protein cake,’ according to Josh Schonwald, a Chicago-based author and one of two tasting volunteers. The 5-ounce burger, which cost more than 250,000 euros ($332,000) to produce, was developed by Mark Post of Maastricht University with funding from Google co-founder Sergey Brin. Post is among scientists including those at Modern Meadow and New Harvest who are experimenting with ways to grow meat in labs as an alternative to raising livestock, which contributes 18 percent of greenhouse gas emissions and uses 30 percent of the world’s ice-free land, according to an Oxford University study.”

Filed Under: Blog, In the Pipeline Tagged With: , , , , ,

In the Pipeline: 8/7/13

August 7, 2013 by Leave a Comment

These suckers are floating around London’s sewers and they’re spun up about fracking? I’m not a betting man, but I’m willing to wager that burning “fatbergs” is much dirtier and less efficient than hydrocarbons.

Newsy (8/5/13) reports: “Workers at a water company in London have made a historic and disgusting find — a so-called ‘fatberg.’ It’s a combination of fat poured down drains along with flushed wet wipes. The two coupled together to create a massive clump of waste. The International Business Times reports this ‘fatberg’ weighs 15 tons and blocked about 95 percent of the sewer. For comparison, it’s as large as a double-decker bus. Workers found the clump of fat — reported to be the largest in British history — after nearby residents complained they weren’t able to flush their toilets. The good news is workers found the large blockage just in the nick of time. According to MSN, if the ‘fatberg’ wasn’t found soon, it could have caused sewage to come out of several manholes nearby. The fat deposits have been a problem in the past, but they have never been this bad. Water company leaders have continued to ask residents to avoid flushing wet wipes and fat because of the unappealing result. But what’s being done with the fat now? Apparently it’s already being put to good use. KCPQ notes the fat will be burned to create power. Before, fat used to be sent to waste plants and was simply tossed out. The large fatberg, along with much smaller fatbergs, could create enough energy to power 39,000 homes.”

Memo to Obama Motors executives: You cannot sell a product people don’t want and expect to make a profit. 

The Wall Street Journal (8/6/13) reports: “General Motors Co. cut the starting price of its latest Chevrolet Volt electric car by 13%, expanding a price war among makers of plug-in vehicles in response to sluggish demand. The price cut is yet another sign of the difficulties GM has faced trying to establish a market for plug-ins. Overall, plug-in vehicle sales are rising, driven by offerings such as the Tesla Model S from startup Tesla Motors Inc. But despite government subsidies, they remain a niche market. Limited driving range is an obstacle for most all-electric cars. Volt, which uses a gasoline motor to extend its range to 380 miles, has to compete with fuel- efficient Chevrolets that sell for as little as half its sticker price.”

Huh, turns out adding pipelines does help prices at the pump.

The Energy Information Agency (8/6/13) reports: “The discount of West Texas Intermediate (WTI) crude oil to Brent crude oil, which averaged $18 per barrel in 2012 and increased to a monthly average of $21 per barrel in February 2013, closed below $1.50 per barrel on July 19, 2013, and averaged $3 per barrel for the month. The strong demand for light, sweet crude oil in the Midwest and new pipeline capacity to deliver production from the West Texas Permian Basin directly to the Gulf Coast contributed to the price of WTI rising relative to Brent crude oil. EIA expects the WTI discount to widen to $6 per barrel by the end of 2013 as crude oil production in Alberta, Canada, recovers following the heavy June flooding and as midcontinent production continues to grow.”

Even Don Draper can’t save this guy.

The Daily Caller (8/6/13) reports: “Green groups are gearing up for a fight with free-market organizations and the coal industry over President Obama’s pick to head the Federal Energy Regulation Commission. In June, Obama announced he was nominating Ron Binz to head up FERC, which regulates electric grids, gas pipelines, natural gas export terminals and hydroelectric power plants. Yet Binz’s tenure as the head of the Colorado Public Utilities Commission from 2007 to 2011 was controversial…Green groups are pushing Binz’s nomination, taking unusual steps to ensure that it goes through. Green Tech Action Fund hired the public relations firm VennSquared Communications to support Binz’s nomination. Support for Binz among environmentalists has mainly focused on his advocacy for renewable energy and energy efficiency, but free-market groups are critical of his activism while serving as Colorado’s top regulator.”

Doubling down on mandates for fuel that doesn’t exist and jacking up food and fuel prices for all Americans. All in day’s work for the EPA.

The Institute for Energy Research (8/6/13) reports: “The U.S. Environmental Protection Agency announced today its final 2013 rule for the Renewable Fuel Standard (RFS) program. The rule now requires refiners to blend 16.55 billion gallons of biofuel into the U.S. fuel supply. Institute for Energy Research President Thomas Pyle released the following statement in response to the announcement: ‘Today’s announcement by the EPA that federal regulators will increase the requirement on refiners this year to blend a staggering 16.55 billion gallons of biofuel is the latest example of how Washington bureaucracies don’t understand the real world or how energy mandates affect real people. The continued push to mandate phantom fuels like cellulosic biofuel is driving up the cost of energy and food for everyone, disproportionately hurting middle class and lower income families.'”

Filed Under: Blog, In the Pipeline Tagged With: , , , , ,

Congress Takes First Step in Stopping a Carbon Tax

August 5, 2013 by Leave a Comment

WASHINGTON — American Energy Alliance President Thomas Pyle released a statement today following the passage of H.R. 367, the Regulations From the Executive in Need of Scrutiny Act of 2013 (REINS Act). This bill includes Rep. Steve Scalise’s (R-La.) amendment which would require any tax or fee on carbon dioxide to be approved by Congress. Pyle’s statement follows:

“This reaffirms what we suspected all along. When put to a vote, Congress would side with the American people who overwhelmingly reject a carbon tax.

“Today’s vote should serve as a wake up call for those across the ideological spectrum who are working behind the scenes to impose a carbon tax on the American people. This is an important first step in putting a carbon tax in the grave alongside its close relative, the cap and trade bill.”

To read AEA’s letter on Rep. Scalise’s anti-carbon tax amendment, click here (PDF).

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Filed Under: Press Releases Tagged With: , ,

In the Pipeline: 8/5/13

August 5, 2013 by Leave a Comment

Actions speak louder than words. 

The Washington Times (8/4/13) reports: “If the Obama administration is indeed waging a “war on coal,” as its critics contend, then newly minted Energy Secretary Ernest Moniz aims to build a bridge between the opposing camps. Since joining the administration about 10 weeks ago, Mr. Moniz — a Massachusetts Institute of Technology scholar who is considered to have one of the nation’s brightest minds on energy issues — has offered an olive branch to the besieged American coal industry, widely viewed as the mortal enemy of a White House bent on drastically reducing carbon emissions and doubling down on investments in renewable fuels such as wind and solar power, at the direct expense of coal. ‘There is no war on coal,’ Mr. Moniz insisted last week at a breakfast hosted by The Christian Science Monitor. ‘We start by saying we must control CO2 emissions. So then, after many years of talking the talk, the issue is walking the walk in terms of developing the technology to control those emissions.’”

The last Republican governor to show this much love to wind and solar? Bob McDonnell.

Master Resource (8/2/13) reports: “‘What Governor McCrory has now acknowledged to an audience of advocates for forced utilization of wind and solar power is that, behind the scenes, he was using his influence with Republican lawmakers to block this reversal of one of the most egregious forms of crony capitalism on the books in North Carolina.’ Gov. Pat McCrory, speaking recently to the Appalachian Energy Summit in Boone, North Carolina, subtly and without fanfare dropped what has to be considered a bombshell. According to the Watauga Democrat, “‘McCrory drew applause from summit attendees when he said he stepped in to stop a legislative effort this year to end state subsidies for renewable energy development.’ McCrory is referring to legislation that was introduced early in the session to repeal substantial portions of 2007’s Senate Bill 3, which mandates that at least 7.5 percent of the electricity used by North Carolinians must come from renewable energy sources like solar and wind power. Another 5 percent can come from reductions in energy usage, falsely referred to as energy efficiency. The mandates are a massive subsidy to these industries.”

Not familiar with North Carolina’s energy portfolio? IER has you covered.

The Institute for Energy Research (8/1/13) reports: “North Carolina does not produce oil and natural gas, even though there are potential offshore natural gas plays and the potential for onshore shale gas plays. Instead of producing some of its own energy resources, North Carolina imports oil and gas supplies from other states and overseas. The same is true for the coal that supplies the state’s coal-fired generating units. North Carolina primarily uses coal from West Virginia and Kentucky. The state’s electricity generation is mainly produced by coal, followed by nuclear power and natural gas. The residential and transportation sectors lead the state’s energy consumption, followed equally by the commercial and industrial sectors.”

Clarity would be good. Looking for clarity from this Administration is a fool’s errand.

Committee on Energy and Natural Resources (PDF) (8/2/13) reports: “Recent developments regarding the approval of new export facilities have generally met with praise from both supporter and skeptics of LNG exports. DOE claims the authority to modify or rescind prior approvals under two provisions of the Natural Gas Act (NGA): section 3(a) and section 16. Section 3(a) authorizes DOE to issue ‘supplemental orders’ that it finds ‘necessary or appropriate’ after providing an opportunity for hearing. Such orders must be ‘for good cause shown.’”

You might have missed this. But we did not.

The Capital Research Center (8/1/13) reports: “Some argue that a carbon tax would be a less harmful alternative to ever-greater environmental regulation, but the idea has such strong drawbacks that few conservatives are willing to support it. Still, non-conservative donors continue to push the scheme among conservatives. Is the carbon tax genuinely popular with conservatives and Republicans?  For over a year, reports have been cropping up in the media about the supposed growth of conservative and Republican support for a carbon tax.  A former congressman, Bob Inglis (R-S.C.), seems to be devoting himself to the project.  The Christian Coalition, often identified as part of the ‘religious right,’ and some economists at the American Enterprise Institute, a think tank associated with the Republican establishment, have spoken kindly about the idea.”

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