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Jun 27, 2012

Mandating the theoretical, hypothetical, impractical, implausible, and impossible.

Cartoon: By Glen McCoy.

Ever since the environmental movement became the new chic and global warming, the new religion, governments have been crushing each other underfoot in an all out stampede to be seen to be doing something about the climate. Billions of dollars have been wasted in subsidies, research grants, funding anybody who claims to have a workable idea, as well as grandstanding on the issue.

Enormous resources have been poured into subsidies designed to encourage industries such as solar and wind power which are uneconomical as stand alone enterprises. One reason for the high electricity prices in Australia is the mandated requirement for increasing proportions of power to be sourced from expensive ‘renewable’ sources.

The US has gone one step further with the EPA mandating the use of large quantities of cellulosic ethanol mixed into fuel. This apparently seemed like good idea at the time in 2005 when its production was considered a viable hypothesis. It has yet to be produced but despite its unavailability, 500 million gallons have to be used by fuel companies this year:

Federal regulations can be maddening, but none more so than a current one that demands oil refiners use millions of gallons of a substance, cellulosic ethanol, that does not exist.

"As ludicrous as that sounds, it's fact," says Charles Drevna, who represents refiners. "If it weren't so frustrating and infuriating, it would be comical.” And Tom Pyle of the Institute of Energy Research says, "the cellulosic biofuel program is the embodiment of government gone wild.”

Refiners are at their wit's end because the government set out requirements to blend cellulosic ethanol back in 2005, assuming that someone would make it. Seven years later, no one has. "None, not one drop of cellulosic ethanol has been produced commercially. It's a phantom fuel," says Pyle. "It doesn't exist in the market place.” And Charles Drevna adds, "Forcing us to use a product that doesn't exist, they might as well tell us to use unicorns.”

And yet, they still have to pay what amounts to fines. …

The EPA does have discretion to lower the annual requirement. And one supporter explains, that's what the agency is saying. "We are going to reduce your blending obligation by 98 percent because we feel that that’s the right thing to do," says Brooke Coleman, the executive director of the Advanced Ethanol Council of the Renewable Fuels Association. "We are going to maintain your blending obligation on the gallons that we think are going to emerge.”

The EPA, which would not speak on camera, is still hoping production of cellulosic ethanol will emerge. A study by the Congressional Research Service, however, says the government "projects that cellulosic bio fuels are not expected to be commercially available on a large scale until at least 2015.” …

… So the refiners are now suing the EPA, in part because the mandate gets larger and larger-- 500 million gallons this year, 3 billion in 2015 and 16 billion in 2022.
Just so you Yanks over there don’t think we are picking on you, the rest of us are just as bad. The Queensland government spent over $110 million in an effort to be the first and foremost in building a ‘carbon capture’ powerhouse. Despite the infusion of $50 million from the feds, it had to be written off. The $10 billion ‘green bank’ designed to fund renewable energy and green technology projects is certain to be pissed up against the wall.

Still, its not a great comfort to know that there are sillier governments out there.

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