EPA - Washington's Latest Favor (gallon, Congress, wages, salaries)

[Kibby]

From the Wall Street Journal ......
Washington's Latest Special Favor - Of the nation's 143 refineries, one was exempted from the EPA's ethanol mandate. Why?

Special Favors are nothing new, but it's always good to at least know who is receiving the "Favor" and why. The "Favor" is often buried in fine print in the middle of some esoteric announcement that the public doesn't generally read. The EPA announcements are just like that - boring, long and typically filled with hits on some folks and gifts to others.

This particular "rule" is the annual EPA quota that mandates how much renewable fuel (ethanol) must be blended into gasoline. It was "delayed" from last fall and just released last week. Turns out there is an exemption (waiver) for one un-named refinery out of 143 refineries in the USA. The EPA won't say who this refinery is. So -- why is this important (other than the obvious anonymous "Favor"?

This "blend rule" directly effects the price of gasoline and we get a glimpse into what the other refineries are doing because of the "blend rule". The quota for 2013 is 16.5 Billion gallons, but your can 'pay your way' out of the "rule" by purchasing "credits" from the EPA - only that ONE refinery gets out of the "rule" without having to purchase the "credits".

The 89-page rule is dull reading, until you get to page 11. Tucked on that page is one short sentence, which reads: "EPA has approved a single small refinery/small refiner exemption for 2013, so an adjustment has been made to the standards to account for this exemption." In English: Of the nation's 143 refineries, one (and only one) lucky player somehow had the pull to win itself a free pass from this government burden. Not only that, the rest of the industry gets to pick up its slack.

This matters because for refineries to stuff ballooning amounts of ethanol into a static gas pool, they must blend it at levels of more than 10%. Since the nation's auto makers have declared they will void the warranties of cars using gas with more than 10% ethanol, refineries face lawsuits. Most have instead turned to buying federal renewable "credits" to make up for the ethanol they don't blend.

As demand for these credits skyrockets, so has the price—jumping from a few pennies a gallon last year to close to $1 a gallon today. Oil refiner Valero has said the credits could raise its cost by a stunning $750 million this year, a hit that will be passed on to consumers. PBF Energy just told investors that its disappointing second-quarter earnings were rooted in the mandate, noting that the $200 million it expects to fork over for ethanol credits this year will exceed the salaries and wages that it pays to operate all three of its refineries.

Some refineries have just lowered production to escape the "Rule" (which raises the price of gasoline), some are shipping the refined gasoline off shore (escapes the "Rule" and raises the price of gasoline), some are just shutting down if they are among the small refineries scattered around the country.

This is the kind of behind the scenes stuff that few people are aware of - the Ethanol mandates come from Congress, the Quota level comes from the EPA ..... both have proved to be detrimental and Special Favors for corn producers (often Big Farm business) and probably for a particular CongressCritter to save a small refiner in his/her State. This is the way Votes are purchased.

A growing concern for me is all these reports I've been reading about "buying credits" and "paying fines" to the Government - it adds up to Millions and Millions of dollars that go into the Black Hole of the Treasury with little accountability. Congress doesn't mandate or oversee these "fines", "credit purchases" & "waivers" - it's coming from Government Departments (like the DOJ) and Agencies (like the EPA).

[thecoalman]

Originally Posted by Kibby

A growing concern for me is all these reports I've been reading about "buying credits" and "paying fines" to the Government - it adds up to Millions and Millions of dollars that go into the Black Hole of the Treasury with little accountability. Congress doesn't mandate or oversee these "fines", "credit purchases" & "waivers" - it's coming from Government Departments (like the DOJ) and Agencies (like the EPA).

The mandates and credits are the dirty little secret of the renewable industry and can often make the subsidies look like peanuts. For example in states with net metering the power producer will often pay more for the renewable energy going into the system from people's houses than they are charging them back becsue they get a credit for it to meet mandates. Here in PA if you install a solar system you get a credit which you can then sell to the power producer.... In each case the cost of those credits is folded into the rates consumers ans business's are paying.

[Torpedos]

there is no hope for this to change. It is all about money.

[KS_Referee]

This is what the man-made global warming scam has been about all this time. Follow the money. All roads lead to Washington DC.


Walter Williams just pointed out another link with follow the money and energy: http://cnsnews.com/commentary/walter...y-manipulation

[HappyTexan]

Yes it is all about money. The EPA lives for fines.

When the smoke from the Mexican field burnings drift up to Texas we have to impose ozone action days.
The EPA counts that smoke drift as pollution in Texas and we are fined because of it.
This is an annual occurrence. The EPA doesn't care that this pollution wasn't generated by Texas; all they care is if we go over that magic number we owe them money.