A coalition of biofuel supporters yesterday handed the oil industry a heavy dose of sarcasm for Valentine’s Day. In a Web video posted in the afternoon, the group Fuels America portrays men, women, kids and even polar bears expressing an undying love for petroleum. The video begins with a smooching sound and ends with a woman wishing for the country to be “stuck on oil forever, and ever, and ever.” “I love what this oil does to my feathers — they’re so shiny,” an oil-drenched bird says at one point in the video. “Oil companies … I f—ng love you,” a polar bear later proclaims.
With U.S. EPA Administrator Lisa Jackson leaving the agency today, two of her lieutenants are being discussed in Washington, D.C., as leading candidates to succeed her. Deputy Administrator Bob Perciasepe and EPA air chief Gina McCarthy — both with extensive experience at EPA and as state regulators — have the regulatory chops that environmentalists prize and also have reputations for giving industry a seat at the table for rulemakings.
With last year’s withering drought still fresh on their minds, corn growers are hoping Mother Nature will give them a break in the coming growing season. Projections released by analysts over the past few days are so far optimistic, predicting a record number of acres to be planted and harvested, despite lingering dry conditions. But at the beginning of last year, analysts also predicted a bumper crop — and then watched their projections fall as the weather turned warm and stayed dry throughout the summer.
The persistent U.S. drought is taking a toll on producers of ethanol, with corn so scarce that almost two dozen ethanol plants have been forced to stop production. The Renewable Fuels Association, an ethanol industry trade group, provided data to The Associated Press showing that 20 of the nation’s 211 ethanol plants have ceased production during the past year, including five in January. Most remain open, with workers spending time performing maintenance-type tasks. But ethanol production probably won’t resume until after this year’s corn is harvested in late August or September. Industry experts don’t expect a shortage — millions of barrels are stockpiled and the remaining 191 plants are producing. Yet concern is mounting .
President Obama showed last night that he was eager to spend his renewed political capital on priorities that he sometimes downplayed during his first four years in office — notably climate change. Obama devoted more than two paragraphs of his State of the Union address to the issue, portraying climate change as a dangerous threat to be avoided through regulation if legislation proves to be impossible. “For the sake of our children and our future, we must do more to combat climate change,” said the president, lowering his voice and slowing his pace for emphasis.
The president called on Congress to create an Energy Security Trust, an idea authored by the nonprofit group Securing America’s Future Energy that would utilize some oil and gas revenues from federal lands to fund research into alternative fuel vehicles. “In fact, much of our newfound energy is drawn from lands and waters that we, the public, own together,” Obama said. “So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good. “If a nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we,” Obama said, referring to SAFE’s Energy Security Leadership Council, which is chaired by FedEx Chairman Frederick Smith and former Marine Corps Commandant Gen. P.X. Kelley.
Ernest Moniz, a professor of physics at the Massachusetts Institute of Technology, is a top candidate to replace outgoing Energy Secretary Steven Chu, according to industry sources. President Obama is considering tapping Moniz, a nuclear physicist, to replace Chu, who announced his resignation earlier this month. Moniz, 69, served as the Energy Department’s undersecretary during the Clinton administration and has advised Obama on central components of the administration’s energy plan, including a retooling of the country’s stalled nuclear waste program, energy research and development, and unconventional gas.
U.S. EPA is eager to get the biodiesel market on its feet after a series of fraud cases, a top agency official told an industry conference here last week. Bryan Bunker, acting director of the EPA Office of Transportation and Air Quality’s compliance division, said the agency wants to build “high confidence” in the program by establishing third-party auditors for renewable fuel credits and protecting refiners from liability for invalid credits. “We’re eager to see this kind of program out there, to see it happen and to have people start validating [credits], do this kind of oversight,” Bunker said, “so we propose that the program start right away.”
The United States produced more than 13 billion gallons of corn ethanol in 2012 and is expected to produce a similar total in 2013. Where does it all go? Some is exported to Brazil and the European Union, but most goes into our fuel tanks. According to the Energy Information Administration, Americans burned 134 billion gallons of gasoline that contained 12.87 billion gallons of ethanol in 2011. Those figures would place the average ethanol content (by volume) of a gallon of gasoline sold in the United States at about 9.6%. The good news is that the Renewable Fuel Standard, or RFS, has successfully met its goal of displacing 10% of gasoline consumption. The bad news is that the country has bumped up against the dreaded Blend Wall, or a saturated market for ethanol.
Congressional bills proposing to pare down the renewable fuel standard are taking their toll in the investment arena, a financial adviser said last week. Legislation introduced in Congress over the past few years and the recent talk of changing or repealing the standard this year are shaking investors’ confidence, the consultant said. The result is that investors are feeling uneasy about decisions they make and wondering whether the targets set by the RFS are realistic.