Environmentalists were therefore surprised last November when the EPA proposed slashing the annual quotas for biofuels.
Industry-observers had been scratching their heads for six months trying to figure out why the EPA had decided to undermine a bipartisan environmentally-friendly law that even George W. Bush liked.
Earlier speculation centered around the Keystone Pipeline. Some feared that the Obama administration had already privately decided to kill the Keystone project, and in an effort to placate a sure-to-be-incensed oil industry, proposed gutting biofuels as a consolation prize for Big Oil. But the administration recently put the pipeline on hold indefinitely, and the EPA is still gunning for biofuels.
Now the oil industry is claiming that a component of the licensing of the fuels, called a Renewable Identification Number (RIN), has become too expensive, and that’s the reason the standards must be gutted. Industry advocates say the RIN argument is a red herring, and that Big Oil simply doesn’t like the competition from more climate-friendly fuel alternatives like ethanol blends or biodiesel. And of course, the oil industry hated biofuels long before RINs became the latest flavor of the month.
Things got even more interesting last week when Reuters reported that the EPA decision on biofuels came after the notoriously-well-connected Carlyle Group and Delta Airlines weighed in with VP Biden, via intermediaries. A little more on Carlyle from AB
Carlyle is a politically connected powerhouse whose board of advisors has been graced by the names of numerous political luminaries from both the Democratic and Republican Parties including former President Bush, his Secretary of State James Baker III, former Secretary of State Colin Powell, former SEC Chairman Arthur Levitt, Britain’s former Prime Minister John Major, ex-Time magazine media glitterati Norman Pearlstein and former Clinton White House Chief of Staff, Mack McLarty. The firm is currently headed by the highly regarded ex-IBM CEO Lou Gerstner.
It’s the connection of Carlyle and Delta that finally drew CREW’s ire.
“The EPA, which has never previously reduced renewable fuel standards, seems to have done so now as a result of congressional and White House intervention,” CREW Executive Director Melanie Sloan said. “Given that the agency’s decision to lower renewable fuel standards is an unprecedented break from past practices, the public has a right to know whether this decision was based on policy or politics. The EPA inspector general should immediately investigate, ” she added.
The concern now, among climate advocates, is that the uncertainty over the biofuel standards, and the possible cut in the overall quotas, may end up gutting the nascent biofuel industry, effectively shutting it down before it’s even been given a chance to work out the kinks.