Why Oil Companies Need $150 Per Barrel Of Oil – The Case For Destroying The Rewable Fuels Standard

June 19, 2008 at 4:44 pm Leave a comment

The following is a letter to the EPA written by David Blume that was just published in Renewable Energy World.

David Blume

by David Blume, Author

The purpose of the Renewable Fuels Standard is to reduce our dependence on fossil fuels, reverse the effects of greenhouse gas emissions, and eventually end the toxic releases from petroleum, coal, and other fossil fuels. The idea is to replace these fuels with clean alternatives like ethanol, which, unlike fossil fuels, are based on captured solar energy that is constantly renewed.

When the alcohol industry agreed to sacrifice the Clean Air Act’s oxygenate standard in exchange for its proposed Renewable Fuels Standard (RFS), I was staunchly opposed. Advocates of the RFS said it was a more honest, direct way for us to work toward making our fuel renewable and American, and to wean ourselves from the toxic waste of the petroleum industry (otherwise known as gasoline).

Make no mistake about it: historically, gasoline has ALWAYS been a substance into which oil refineries dispose of whatever waste remains after making valuable products. Just as in the cattle industry, where half of the steer sells as US $15/lb. steaks and the other half ends up as cheap hamburger, in the petroleum business, half of a barrel of oil becomes gasoline. Quite frankly, no one wants to dispose of the 21 gallons of poisonous leftovers at the bottom of each barrel (just how much carcinogenic benzene, toluene, or xylene does anyone really need?)

The Clean Air Act’s oxygenate standard made sure that many of the toxic components in vehicle exhaust would be thermally decomposed (read: burned) to carbon dioxide, rather than remaining as Kevorkian carbon monoxide and a witch’s brew of volatile organics. Destroying these toxins in vehicle exhaust relies on the presence of plenty of oxygen to do the job, and alcohol is about 30% oxygen. Since the act was a regulation that had to do with our health, no discretion existed for waiving oxygenate. That standard was all that stood between Big Oil’s profits and hundreds of thousands of deaths each year from respiratory and cancer illnesses. It also was permanent-it had no expiration date.

But in a poor bargain, we traded a standard based on citizens’ health for one based on economic and environmental values, i.e., the Renewable Fuels Standard. The oil companies insisted that we couldn’t have both, but if we would let go of the oxygenate standard, they would not stand in the way too much on the RFS. Of course, they lied and then only permitted an RFS level that we were already meeting prior to passage of the legislation, so that the regulation had no teeth to increase our use of renewables (very clever of those oil companies).

Well, we did manage, over much opposition by Big Oil, to increase the RFS modestly above the existing level, and investment into the Midwest to make alcohol took off. Big Oil mistakenly thought it could keep the alcohol genie in the bottle…but much to its dismay, the genie escaped and started building distilleries in 2005-6.

Now at the time the bargain was made to trade in the oxygenate standard, I complained to everyone in congress and in the alcohol industry that the RFS would be very easy to waive. It was easy to predict all sorts of conditions where governors or the executive branch could say something like, “These environmental regulations are all well and good, but if they get in the way of economic interests, we just won’t be able to afford to do the right thing.”

“No, no,” the RFS advocates retorted, “we will make sure that a ‘no backsliding’ provision is written into the new legislation.” Well gee, that tidbit didn’t quite survive into the final draft. Now some oil-saturated governors are trying to use their statutory power to get the EPA to waive the standard, so oil companies won’t be forced to use farmer’s fuels.

Instead of cleaning up our air, dealing with Peak Oil, reducing dependence on foreign oil, and reversing global warming, we are doing exactly what I feared. We are talking about simply setting aside the RFS for reasons that ignore health, ignore national security, ignore our dependence, ignore our war to control Mideast oil, and ignore planetary climate stability in favor of simple short-term economic gains. The proposal is even more disingenuous, since the alleged economic gains are not even real. For instance, there is no shortage of corn, no matter what you read in the press. We just had the best crop in 33 years, and we are still trying to find silo space to store the huge surplus. We have increased the amount of animal feed we send around the world to record levels, which is a direct result of our increased alcohol fuel production. We use only cornstarch for alcohol, and all the non-starch parts of the corn become high-quality animal feed. More corn production for alcohol means more animal feed, which means more food. It’s simple.

Now that the data is coming in, we are seeing that in addition to the utterly nonexistent corn shortage, grain price increases have no basis in ethanol or the RFS whatsoever. In fact, the price increases result almost exclusively from the rising price of oil and greater demand for meat in China and other developing countries. If it were not for alcohol fuel, the price of gasoline would be even higher than it is today, and the net effect on a citizen’s pocketbook would be many times the alleged effect of ethanol on food prices.

This attack on the RFS has been planned since the day it was first passed. Because as we run out of oil, the fossil fuel industry plans to replace petroleum with more tar sands, oil shale, and coal to liquids. As the EPA, you are well aware that these fuels will increase greenhouse gas emissions scores to thousands of times the emissions from petroleum. They will also increase the pollution of our air with countless tons of metals and volatile gases, pollute what water is left after we drain the aquifers to make synfuels, and irradiate/poison the planet with radioactive particles and mercury from coal.

But for these environmentally foul fuels to be economically viable, the price of a barrel of oil needs to climb to about $150. Biofuels, on the other hand, can be produced realistically, ecologically, and sustainably for less than $70 a barrel, without any breakthroughs in technology. If biofuels, and in particular ethanol, increase in volume, the economic viability of all the alternatives that Big Oil wants to develop are in jeopardy. And that’s a good thing, since as the EPA, you know for certain that development of these fossil alternatives to petroleum are unbelievably incompatible with continuation of life on Earth as we know it.

No, the RFS is not a discretionary guideline to be set aside, as powerful economic interests and their tamed politicians dictate. The RFS is a health standard meant to protect all living things from the total degradation of our planet. You in the EPA are charged with the responsibility to act as a bulwark against corporate environmental irresponsibility, and doing the right thing requires more than standing firm on the RFS. Far from being waived, the standard needs to be increased annually, bear no expiration date, and remain in force until every single Btu of energy this country uses is renewable. Ultimately, that means an end to fossil fuels and an economic and energy system based on the sun.

A call to action:

The window to submit comment on this critical EPA waiver is closing June 23rd, submit written comments today, identified by Docket ID No. EPA-HQ-OAR-2008-0380, by one of the following methods: One the web at http://www.regulations.gov, follow the on-line instructions for submitting comments, by E-mail: a-and-r-docket@epa.gov or by fax: (202) 566-1741.

Learn more about David Blume’s Fight to Save The Renewable Fuels Standard.

David Blume is author of Alcohol Can Be A Gas and Executive Director of the International Institute for Ecological Agriculture.


Entry filed under: Activism, Corporations, David Blume, Ethanol, Global Climate Change, Peak Oil, politicians, Profits, Propaganda, Solutions. Tags: , , , .

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