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05/25/2013, 07:44PM ET
05/25/2013, 07:37PM ET
05/25/2013, 07:31PM ET
On Jul 02, 2012 03:20PM ET in Global Warming
In his 2006 State of the Union message, President G.W. Bush famously (and falsely) declared that America is “addicted to oil.” As a solution, Bush proposed to “fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips and stalks or switch grass.” He set a “goal” to ”make this new kind of ethanol [a.k.a. cellulosic] practical and competitive within six years.”
Congress heeded the call, and in late 2007 passed the Energy Independence and Security Act. EISA mandated the sale of 36 gallons of biofuel by 2022, with 21 billion gallons to come from ”advanced” (lower-carbon) biofuels, of which 16 billion gallons must be cellulosic.
Well, it’s now six years later, and cellulosic ethanol is still a taxpayer-subsidized science project. EISA (p. 32) required refiners to sell 100 million gallons of cellulosic ethanol in 2010, 250 million gallons in 2011, and 500 million gallons in 2012. Reality repeatedly forced the EPA to dumb down the mandated quantities (to 6.5 million gallons in 2010, 6.0 million in 2011, and 8.65 million in 2012). Even those symbolic targets proved to be too ambitious, because, as a commercial commodity, cellulosic biofuel still does not exist.
Nonetheless, the EPA fines refiners millions of dollars for failure to sell this non-existent fuel. Arizona Rep. Jeff Flake has a commonsense solution, H.R. 6047, the Phantom Fuel Reform Act.
Rep. Flake’s one-pager explains the bill’s rationale and how the reform would work. In a nutshell, next year’s cellulosic target would have to be based on this year’s actual production, as estimated by the U.S. Energy Information Administration. From the one-pager:
- [C]ommercially available cellulosic biofuel does not exist. In fact, the Congressional Research Service reported this year that the federal government projects that this phantom fuel is “not expected to be commercially viable on a large scale until at least 2015.”
- Even though commercially available cellulosic biofuel does not exist, U.S. energy producers are faced with a vexing ultimatum: buy millions of dollars of EPA paper “credits” or face hefty fines.
- By February 2013, U.S. energy producers will have paid more than $14 million to the EPA for these phantom fuel credits.
The Commonsense Fix
- Under current law, the independent Energy Information Administration (EIA) must submit to the EPA by October 31st of each year an estimate of projected volume of cellulosic biofuel to be produced in the upcoming calendar year.
- The Phantom Fuel Reform Act would simply require that:
(1) The EIA base that projection on the actual volume of cellulosic biofuel produced between January 1st and October 31st, and
(2) The EPA’s annual cellulosic biofuel mandate reflects the EIA’s more realistic production-based projection.
- Passage of H.R. 6047, the Phantom Fuel Reform Act, would prevent millions of dollars in needless and unnecessary energy costs from being placed on U.S. energy producers and passed onto American consumers.
- It would stop the EPA from forcing U.S. energy producers to choose between buying meaningless compliance or paying hefty federal fines.
- H.R. 6047 would maintain the existence of the cellulosic biofuel mandate while ensuring that it reflects actual industry production rather than unrealistic bureaucratic prediction.