The federal EPA has mandated that oil companies buy a certain amount of cellulosic ethanol made from wood chips, switchgrass, corn cobs and the like, a product that doesn’t even exist (unicorn farts for short), or pay hefty fines. And oil companies have already been forced to pay those fines for their 2011 non-compliance in their refusal to buy those unicorn farts. As a result, Americans get to pay more at the pump for their fart-free gasoline; an artificial, government-forced fuel cost inflation. Howard Portnoy writes:
Question: Do you fill your car’s tank with gasoline that is part cellulosic ethanol, an environment-friendly distillate of wood chips, corn cobs, and switch grass? Let me answer for you: No, you don’t. You couldn’t if you wanted to. Petroleum products blended with cellulosic ethanol aren’t commercially available, because the technology for mass-producing cellulosic ethanol hasn’t been perfected. None of which has stopped the Environmental Protection Agency from imposing hefty yearly fines on oil refiners. According to the The New York Times, in 2011 automotive fuel producers were assessed $6.8 million in penalties. That amount is expected to climb dramatically this year. Guess who ends up footing the bill for the difference?
As Mr Portnoy notes, George W Bush called for this sort of thing in his 2006 State of the Union address, and signed it into Law in 2007. This terrible government mandate to be fined for not putting unicorn farts into the nation’s gasoline was written by the 2007 Democrat-controlled Congress and signed into Law by the squish Republican George W Bush, when not a single commercial cellulosic ethanol plant was up and running. There still isn’t a commercial unicorn fart plant running, even after the government pumped over a billion tax-payer dollars into businesses promising to make those unicorn fart plants.
A December, 2011 article from Bloomberg notes the bankruptcy of one such failed company.
Range Fuels Inc., a cellulosic ethanol company backed by as much as $156 million in U.S. loans and grants from President George W. Bush’s administration, is being forced by the government to liquidate its only factory after failing to produce the fuel.
The closely held company, which counts Vinod Khosla, a venture capitalist and Sun Microsystems Inc. co-founder, as an initial investor, shuttered the factory in Soperton, Georgia, in January after not delivering on its promise to convert woodchips into ethanol, which was intended to help the U.S. become less dependent on foreign oil.
So, Range Fuels Inc shuttered its doors in January, 2011, after proving incapable of producing the unicorn farts, and after soaking up millions of dollars in tax-payer money. The government picking winners and losers, and still, those winners lose. And we all lose in the process. But that’s not all. A January, 2012 article from The New American has even more.
EPA spokeswoman Cathy Milbourn told the Times that the 2012 cellulosic ethanol quota is “reasonably attainable.” The paper continues: “By setting a quota, she added, ‘we avoid a situation where real cellulosic biofuel production exceeds the mandated volume,’ which would weaken demand.”
Milbourn need not worry that production will exceed the EPA’s quota for many years to come. There are simply too many barriers to overcome.
First is that cellulosic ethanol production is so difficult and expensive that no one in the private sector is willing to invest in it without hefty government subsidies. Thus far the feds have poured at least $1.5 billion into ethanol startups, with more subsidies on the way. Not surprisingly, “the half-dozen or so companies that received the first round of subsidies never got off the ground,” the Wall Street Journal noted in a December editorial. Georgia’s Range Fuels, for example, received $162 million in federal and state subsidies to produce ethanol from pine chips; last week The New American reported that Range had folded a year ago, an utter failure. The Journal cited Alabama-based Cello Energy, whose ethanol production was supposed to account for some 70 percent of the 2010 cellulosic ethanol mandate. The company went bankrupt in October of that year, having achieved nothing except bilking taxpayers.
“Incredibly,” the Journal remarked, “those projections [of Cello’s production] were made before Cello had built its plant to produce the fuel and before the technology was proven to work.” Similarly grandiose claims for upcoming ethanol plants are thus to be taken with several grains of salt.
Did everyone get that? There is no commercial production of unicorn farts, but the EPA has stated the 2012 requirement to purchase millions of gallons of unicorn farts is reasonably attainable, knowing there are no unicorn farts to buy. And the businesses that are getting millions of dollars each in tax-payer money are going bankrupt without adding the first gallon of this “product” into the marketplace.
Last year, I wrote about corn ethanol being a net energy consumer instead of a net energy producer. I also showed that corn ethanol produces even more pollution than gasoline, is more expensive than gasoline, is harder on engines than gasoline, and causes “corn for food” prices to artificially inflate. And now, on top of that, we get to foot the bill for a nothing-burger.
Ain’t Big Government Leftists grand?