|
In the push last year to increase production of biofuels, the oil industry got run over.
Lobbyists for refiners advocated for a series of benchmarks that would have to be met before new production targets kicked in. The oil industry’s efforts were rebuffed, however, as lawmakers saw a public policy trifecta: a chance to boost rural economies, decrease oil imports and reduce greenhouse gas emissions.
The Bush administration supported additional production of biofuels, too.
This year, the industry is back, lobbying to change the law with some fresh evidence that the goals of the Renewable Fuels Standard (RFS) could be hard to meet.
Members of the Senate Energy and Natural Resources Committee have already acknowledged the RFS may need some tinkering, although whatever bill the panel pursues is likely to fall short of the industry’s goal of repealing the new law entirely.
“The problems are insurmountable,” said Charlie Drevna, president of the National Petrochemical and Refiners Association (NPRA).
The industry does not think, for example, there is sufficient infrastructure — rail lines to transport ethanol cross-country, for example — to meet the 2008 target of blending 9 billion gallons of ethanol in gasoline. Around 7 billion gallons of ethanol were produced last year.
Refiners that do not meet blending targets may face a financial penalty, which is responsible for much of the aggravation the industry feels about the new law.
“We have to pay for someone else not producing,” Drevna said.
Short of an outright repeal, which oil lobbyists privately acknowledge is not going to happen, one potential compromise is to push back the initial deadlines for up to three years to allow more time for the market to react to the new requirements. The compromise is that the industry would still meet the overall production target by the date specified in the law.
What could help the oil industry’s efforts are new questions about whether biofuels like corn-based ethanol, by far the most widely domestically produced alternative to oil, will generate the cuts in greenhouse gas emissions called for in the energy act.
The RFS calls for 36 billion gallons of renewable fuels to be produced by 2022.
|
