NYT: A Fine for Not Using a Biofuel That Doesn’t Exist

A Fine for Not Using a Biofuel That Doesn’t Exist

WASHINGTON — 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.

Click on the link for the full article

I love when the government gets involved in things it doesn't understand.

I love when the government gets involved in things it doesn't understand.

fine, but the answer isn't to let oil companies solve the problems of sustainability and pollution through sheer spontaneous altruism, or magical concepts such as the invisible hand of the market.

we don't need less government. we need government that is interested in making better informed and more intelligent legislation, rather than being more interested in accomplishing more facile goals generally associated with self-interest or re-election. it's not like it's impossible to craft intelligent energy policy.

Gasoline, bad. Other crap that doesn't exist, good.

Damn big oil for getting us all to work everyday anyhow.

The price of gas must go up to make cleaner alternatives affordable....enjoy the ride

walking is good for ya

Gasoline, bad. Other crap that doesn't exist, good.

Damn big oil for getting us all to work everyday anyhow.

To be fair, there is also some footdragging by the oil industry as well, from what I read in the article.

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.

Never mind that such resources go into the global market. Never mind that it won't last forever. Never mind that the Keystone Pipeline is far from a sure thing.

I agree that there should be some adjustment for the goals if they are unattainable (such is the way of science sometimes), but the general idea seems to be sound.

Interesting as always the instant thoughts.

Mine was about the corncobs.. and the huge subsidies we give corn producers, and how that might factor into their byproduct being forced into an additive no one is making.

As far as i know, corn based fuels have proven to be hugely inefficient and a waste of time and resources.

Pardon me for not having time to read it all, but how effective is this additive supposed to be in doing what?

~Bang

I agree that there should be some adjustment for the goals if they are unattainable (such is the way of science sometimes), but the general idea seems to be sound.

Alternatives are great. Hell, using our own resources would be great. But this amounts to fining YOU for not owning a real lightsaber.

Alternatives are great. Hell, using our own resources would be great. But this amounts to fining YOU for not owning a real lightsaber.

Maybe if they did that we'd have light sabers by now! Did that thought even cross your mind you corporate loving fascist?!

I suspect that there are two sides to this issue.

One of the sides is being well expressed here, and I don't disagree with it.

The other side (I suspect) is that the oil companies currently find it cheaper to pay minimal fines than to make more of an effort to develop this technology. The technology is there, but it is currently expensive. Why bother investing in it if you can just pay a small fine (and at the same time, increase the political pressure to have the requirement overturned by the mere fact that you haven't bothered to do anything)?

Maybe if they did that we'd have light sabers by now! Did that thought even cross your mind you corporate loving fascist?!

Yeah, just like the threat of me getting fined has sparked my employer to offer me affordable health insurance.

Wait, are you saying my lightsaber isn't real??

I guess that's why it failed to cut that guy's arm off before he kicked my arse.

The other side (I suspect) is that the oil companies currently find it cheaper to pay minimal fines than to make more of an effort to develop this technology. The technology is there, but it is currently expensive. Why bother investing in it if you can just pay a small fine (and at the same time, increase the political pressure to have the requirement overturned by the mere fact that you haven't bothered to do anything)?

pay fines they simply pass on to you vs paying even more and passing it on to you ....bend over :pfft:

I believe you are wrong on the tech being up to commercial production level yet,but right on the expensive part.....even with subsidies and mandates to purchase product no green group wants to step up .

why blame the oil companies who have thrown billions at alt energy development?

pay fines they simply pass on to you vs paying even more and passing it on to you ....bend over :pfft:

Econ 101. 99 percent of the time, sellers don't "pass costs" on to the consumer. Sellers charge what the market will bear, and if they can charge more, they will, regardless of what their costs are. Costs like these tiny fines simply affect profit margins.

I believe you are wrong on the tech being up to commercial production level yet,but right on the expensive part.....even with subsidies and mandates to purchase product no green group wants to step up .

why blame the oil companies who have thrown billions at alt energy development?

I didn't say it was up to commercial production. However, the oil companies have had almost 5 years to move further down that road, and I suspect that they 1) have had difficulties getting there and 2) haven't felt the need to try very hard. Both of those things.

Why the oil companies?

I agree the costs are tiny, not so much on not getting passed on with refined fuels(whether direct costs or not,the price of gas jumps when the price of oil does No?)

I'd be perfectly content with .0001% of all fuels sales myself,ya'll would never miss it....pony up.

I would hate to throw gas on the fire, but how can we talk alternative fuels when the fuel companies and our own government won't take the steps for real change.This is more of the same.

There is a storm coming and nobody has the sense to take solid and prudent steps to minimize the damage.

Why the oil companies?....if the tech exists and subsidies and mandates for purchase also exist why them?

The storm coming is a direct result of idiocy....and not by the oil companies

team sanity scores

The U.S. Court of Appeals for the District of Columbia Circuit sided with the American Petroleum Institute (API), saying the EPA cannot set forward-leaning blending projections for cellulosic biofuel when supplies aren't available to meet the requirements.

“[W]e agree with API that EPA’s 2012 projection of cellulosic biofuel production was in excess of the agency’s statutory authority. We accordingly vacate that aspect of the 2012 RFS (renewable fuel standard) rule and remand for further proceedings consistent with this opinion,” the court said in its decision.

Read more: http://thehill.com/blogs/e2-wire/e2-wire/279329-court-decision-on-key-rule-delivers-setback-to-biofuel-industry#ixzz2J5mQBcxv

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Predicto had it right a year ago. There is technology to produce these things, they are energetically effecient (more energy out than energy in), and they are even economically competitive with the government incentives/penalties in place if the EPA stops waiving the penalties (and yes, it does require government action, but take resoucre depletion tax deduction away from the fossil fuel industry and see what happens to their profit margins and the economics of gasoline production/consumption), but the fossil fuel industry is just finding it easier/cheaper/better to fight the policies then to actually try and buy the products. which would cause there to be a market and cause people to actually start producing the stuff.

The issue is related to demand, which is tied to the oil industry avoiding using it and the types of cars we drive (most cars we drive an handle limited amounts of ethanol as compared to Brazil http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil). We're stuck in a loop. We use gas because that's what there is demand for, and that is what there is demand for because that's what we use. There is no real incentive for the oil industry to go out of its way to break the loop. The existing industries have a HUGE infrastructe/interia advantage that has been built in by decades of tax breaks and other things.

Here's some stuff looking at the economis of bio-fuels, including cellulosic biofuels and note some of this stuff is from several years ago in an "industry" where research is constantly moving forward.

http://www.agecon.purdue.edu/papers/biofuels/Economics%20Article-wt%20edits%20(2)%20mh%20Working%20Paper%20Format.pdf

http://www.sciencedaily.com/releases/2012/06/120604181954.htm

http://www.pnas.org/content/105/2/464.abstract

The EPA better START waiving the penalties unless this ruling is overturned

Peter...why is no one producing it?

The EPA better START waiving the penalties unless this ruling is overturned

Peter...why is no one producing it?

Because there's no demand.

There's no demand because our cars can't use high percentages of ethanol like those in Brazil and our cars can't use it because it wouldn't make any sense to sell a car like that here because essentially nobody would buy it because you can't buy gas with high amounts of ethanol in it.

And the oil industry doesn't want to use it because that'll create a demand, which would create a supply, which might start to make it reasonable to buy cars like those sold in Brazil.

And as long as the oil companies get out of buying it, there isn't any demand.

Cellulosic ethanol from an economic stand point is not clearly economically superior with respect to fossil fuels. Most people agree we are at about the break even point w/ the relevant government policies in place (including the EPA penalty).

Given the historical and infrastructure advantages to the existing technology (gas), there isn't enough of an economic advantage to push the scales towards ethanol.

Because there's no demand.

There has been a requirement to use it and fines for not doing so....how is that not demand?

The rule requires refiners to blend 36 billion gallons of biofuel into traditional transportation fuel by 2022. Of that total, the EPA had called for refiners to blend 10.45 million ethanol equivalent gallons last year — but producers pumped out just 22,000.

There has been a requirement to use it and fines for not doing so....how is that not demand?

The rule requires refiners to blend 36 billion gallons of biofuel into traditional transportation fuel by 2022. Of that total, the EPA had called for refiners to blend 10.45 million ethanol equivalent gallons last year — but producers pumped out just 22,000.

1. There are two different issues. Traditional food stock ethanol and cellulosic ethanol. The food stock ethanol is economically ahead of cellulosic ethanol because it is easier to convert them into ethanol (note the articles I posted above about being economically and energetically effecient are with respect to cellulosic ethanol so the harder and more expensive stuff to produce). However, they also cause food prices to go up so there is a balance there. When the oil industry buys enough food stock ethanol prices of food go up and it becomes economical for farmers to sell their corn for food so we are never going to get beyond a certain amount of that as fuel.

2. Then there is cellulosic ethanol, which is what the OP is about and the court case. Cellulosic ethanol is more expensive, but doesn't affect food prices in the same manner to the same extent. So when I say demand, I mean demand for cellulosic ethanol. And a requirement that can be escaped by a find doesn't create demand because the oil industry has been saying, we'll just pay the fine IF we can't get it out of it, AND they look like they are getting out of it.

The EPA has nothing but slash the amounts of required (the amount required in 2011 was been cut from 250 million gallons to 6.6 million gallons) and the oil industry has shown nothing, but interest in fighting the requirements even more.

That doesn't create real demand.

That doesn't create real demand.

Govt mandates don't create real demand?.....who'd a thunk it.

they obviously don't create product either

Govt mandates don't create real demand?.....who'd a thunk it.

they obviously don't create product either

They can create real demand, if the parties involved know they are serious about those mandates

In this case, the oil companies and the companies in position to make cellulosic ethanol don't believe the government is serious about sustaining the mandates and so far it appears they are right.