Government Penalizes Oil Companies For Failing to Deliver Fuels That Don't Yet Exist

Oh, you've got to love gub'ment. Here's a story of how the Environmental Protection Agency made companies that supply motor fuel pay fines because they failed to deliver alternative fuels.

The companies did have a good reason, which the EPA rejected, as that kind of fuel actually doesn't exist yet:

When the companies that supply motor fuel close the books on 2011, they will pay about $6.8 million in penalties to the Treasury because they failed to mix a special type of biofuel into their gasoline and diesel as required by law.

But there was none to be had. Outside a handful of laboratories and workshops, the ingredient, cellulosic biofuel, does not exist.

In 2012, the oil companies expect to pay even higher penalties for failing to blend in the fuel, which is made from wood chips or the inedible parts of plants like corncobs. Refiners were required to blend 6.6 million gallons into gasoline and diesel in 2011 and face a quota of 8.65 million gallons this year.

“It belies logic,” Charles T. Drevna, the president of the National Petrochemicals and Refiners Association, said of the 2011 quota. And raising the quota for 2012 when there is no production makes even less sense, he said.

Matthew L. Wald of The New York Times explains: Link (Photo: David Eggen for The New York Times)

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This post is misleading. As the New York Times article explains, The EPA is just following the standards set by the 2007 Energy Independence and Security Act, and if anything, they have been "lenient" by the standards.

Whether the law itself is bad or not remains debatable, as the goal was apparently to provide incentives for the development of biofuel. In hindsight we might say that Congress had been overoptimistic, but perhaps an extra $6.8 million in research spending early on would have spared them this penalty.

If anything, law is law, and unless overturned it stands above logic.
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I am far from knowledgeable about this subject, but I thought this kind of thing was the norm.

"Automakers must have a fleet-wide average of X miles per gallon by X date."

"Light bulb manufacturers must increase efficiency X percent by X date."

Unless I'm mistaken, the manufacturers (in this case, oil companies) are responsible for funding the necessary research and implementing it in time to comply with the standard.

This post makes it sound like oil companies were just waiting around for someone to make this breakthrough, but were subsequently penalized when it didn't simply "emerge" from everyday sciencing.

Wouldn't it be more apt to say "Government Penalizes Oil Companies For Failing to R&D New Biofuels Within 5-year Deadline?"

It's possible that the "gub'ment" had miscalculated the feasibility of this technology... or maybe oil companies weren't as motivated by the legislation as they should have been. Either way, I doubt they'll sweat the 6.8 mil. It's hard to feel sorry for companies that literally have more money than they know what to do with.
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