E2 Morning Roundup: EPA expected to bump up ethanol fuel blend

EPA E-15 announcement expected
 
The Environmental Protection Agency is poised to allow vehicles from model years 2007 onward to run on gasoline that contains increased levels of ethanol, sources tracking the issue say.

The agency will allow use of so-called E-15, which consists of 15 percent ethanol and 85 percent gasoline. Currently, there is a 10 percent ethanol limit in gasoline.
 
The announcement is expected Wednesday afternoon but EPA hasn't tipped its hand yet. “Stay tuned,” an EPA official told E2 on Tuesday.
 
Confidence was also high from sources that the agency would say that E-15 is not safe for cars and light trucks model year 2000 and older, or for any motorcycles, heavy-duty vehicles, off-road vehicles and non-road engines.
 
EPA is not expected to make a decision until later in the year on whether the higher ethanol blend is safe for cars and light trucks that are model years 2001 through 2006.
 
Merely one goal of ethanol backers

The decision is a partial victory for ethanol backers, who would not be happy if EPA closes the door on a higher ethanol fuel blend for the older vehicles. They have also been seeking a more unified effort to push for a host of help from the Obama administration and lawmakers to ensure the long-term survival of their industry. This includes floating a draft blueprint that, among other, things calls for a one-year extension of an expiring excise tax credit, a new four-year production tax credit and help for expanding flex-fuel vehicles and pumps.

Foes fighting federal help
 
A coalition of taxpayer, environmental and livestock groups held a conference call Tuesday to fight this new effort and argue that the ethanol industry either is mature enough to handle itself without federal help or has not delivered the environmental benefits as promised.
 
“In our view, this is not a reform of a subsidy program but merely a new form of a 30-year subsidy program,” Patrick Boyle, president of the American Meat Institute, said. “A subsidy is a subsidy is a subsidy.”
 
“The ethanol industry is addicted to subsidies,” said Taxpayers for Common Sense’s Steve Ellis on a call that also included the Environmental Working Group, Grocery Manufacturers Association and Friends of the Earth. “It’s like an alcoholic saying I’m going to give up booze and simply switch to beer.”
 
Ethanol team unite!

All four main ethanol industry groups — American Coalition for Ethanol, Growth Energy, Renewable Fuels Association and the National Corn Growers Association — sent out a joint preemptive attack via e-mail while the conference call was still taking place.
 
“America’s ethanol industry has been an undeniable success, creating hundreds of thousands of jobs and reducing our nation’s reliance on foreign oil,” according to their joint statement. “These groups that have repeatedly attacked ethanol without validation would leave America with just one course of action: increasing our addiction to foreign oil.”

Liability issue may emerge in debate
 
While ethanol backers hope that any increased blend of the gasoline additive will help the long-term viability of the industry, Texas lawmakers in both parties are seeking legal protection for oil refiners and others that fear exposure to costly lawsuits.  

 

The Texas lawmakers fear the higher ethanol blend could lead to a host of lawsuits against the fuel industry, reminiscent of when the additive methyl tertiary butyl ether (MTBE) was found to contaminate groundwater. 
 


Gulf spill, drilling commission meets

The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling meets Wednesday to publicly discuss preliminary findings. The fourth meeting of the commission will discuss the “History and Future of Offshore Drilling” and “Regulatory Oversight.” The commission will deliberate for three hours starting at 1 p.m. and then hold a 30-minute public comment period at the Westin Grand hotel in Washington, D.C.

Reaction mixed to lifting drilling ban
 
The meeting comes as reaction to the Interior Department’s announcement Tuesday to lift a deepwater oil and gas drilling ban about six weeks ahead of schedule was understandably mixed and raised eyebrows among both defenders and critics of drilling alike.

Drilling backers fear de facto ban
 
Drilling backers — including several powerful industry groups — fear that new federal requirements will create a bureaucratic quagmire that ties up permits even though the official ban has been lifted.
 
“Without additional resources and a serious commitment by the government to process and approve permits and other requirements expeditiously, the moratorium will give way to a de facto moratorium, which will continue to cripple the already hard-hit Gulf region and cost more than 175,000 American jobs a year,” said American Petroleum Institute President and CEO Jack Gerard, in a statement that echoed many others posted Tuesday by drilling backers.
 
Liberals aghast
 
Some liberal groups were aghast at the lifting of the official suspension while a bipartisan commission appointed by President Obama and others are still reviewing the causes of the Gulf spill.
 
“This is pure politics of the most cynical kind. It is all about the 
election season, not safety and environmental concerns,” Greenpeace
USA Executive Director Phil Radford said. “The White House wants us to 
believe that they have solved all the dangers of offshore drilling and
 we can return to business as usual. It is a false promise, if not a
 big lie.”
 
Chill out, say some greens

But some others among green groups said the lifting of the ban now is appropriate given safety rules the Interior Department has announced and will still initiate.
 
“This was going to expire Nov. 30 anyway,” Sierra Club’s Athan Manuel told E2. “And it did give them the time to look at safety and cleanup measures” regarding drilling in the Gulf, he said.
 
He noted green groups will still look to reduce oil dependence overall and will fight efforts to expand drilling along the East and West coasts and parts of Alaska. “This shouldn’t be the end of this discussion,” Manuel said.
 
Landrieu keeps hold on Lew
 
Sen. Mary Landrieu (D-La.) said she is not lifting her hold on Jacob Lew’s nomination to head the White House Office of Management and Budget (OMB) just yet, and wants to wait and see how the Interior Department handles the permitting process for new drilling projects in the short term.
 
White House to Landrieu: Drop it already
 
White House spokesman Robert Gibbs Tuesday continued his rather pointed criticism of Landrieu’s hold.
 
“We hope that, as we work through the normal course of a policy that ensures that oil drilling is done in a safe way, certainly that Senator Landrieu would judge Jack Lew on the merits of being a budget director, not of playing politics and getting issues that are ancillary to what he does involved in that equation,” Gibbs said. Gibbs last month called Landrieu’s hold “sad” and “outrageous.”
 
Constellation nuke talks still a no-go
 
Despite the urging of the Energy Department and OMB officials to reenter the talks, Constellation Energy appears no closer to continuing movement towards building a new nuclear reactor at its Calvert Cliffs (Md.) facility.
 
OMB spokesman Ken Baer told E2 Tuesday that he hoped Constellation officials are reviewing new terms the administration sent Friday, the day that the company sent a letter to the Energy Department announcing it was pulling out of the project despite a promised $7.5 billion DOE loan guarantee.
 
But a Constellation spokesman simply referred E2 to the letter sent Friday to Deputy Energy Secretary Dan Poneman citing “significant and ongoing uncertainty” due to the OMB’s “inability to address significant problems with its methodology for determining the project’s credit subsidy cost and the unreasonably burdensome conditions a loan guarantee under this approach would require.” 
 
“This is an extremely complex financing,” Baer explained, noting it is different than the only conditional loan guarantee the administration has given out for a nuclear project — to be built by Southern Company in Georgia. For one, he said, Southern Company under state law is able to charge consumers to help pay for the project as it goes along, which Constellation cannot do. This increases the level of risk associated with the Constellation project, he said. Still, he said, administration officials were “very surprised” by Constellation’s decision.
 
Constellation and French power company Electricite de France are partners in a joint venture, Unistar, that intended to make the Calvert Cliffs reactor the first of a fleet of identical units around the country.
 
On Tap Wednesday: ACEEE releases energy efficiency scorecard
 
The American Council for an Energy-Efficient Economy is releasing a scorecard on energy efficiency measures in all 50 states and the District of Columbia. ACEEE Executive Director Steve Nadel, representatives from the Arizona and New Mexico state governments, Energy Department Assistant Secretary for Energy Efficiency Kathleen Hogan and the Environmental Protection Agency’s air quality chief, Gina McCarthy, are among those participating in the 10 a.m. roll out at the National Press Club.
 
On Tap Wednesday Part 2: EIA forecasts winter fuels
 
The Energy Information Administration is releasing its “Winter Fuels Outlook,” including heating fuel costs. EIA Administrator Richard Newell will also release October’s “Short-Term Energy Outlook” at the National Press Club at a news conference beginning at 8:30 this morning.

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