gas prices – The Libertarian Republic

Biden Scraps Green Fuel Rules In Bid To Slow Skyrocketing Gas Prices

Guest Post — Tue, 12 Apr 2022 17:20:35 +0000

Thomas Catenacci

President Joe Biden is expected to announce a temporary pause on an environmental rule that regulates gasoline mix Tuesday, the White House announced.

Biden is set to announce that the Environmental Protection Agency (EPA) will allow energy providers to supply gas stations with 15% ethanol blend fuel throughout the summer, during an event in Menlo, Iowa, on Tuesday, according to a White House fact sheet. Gasoline with 15% ethanol — which has been banned for a decade under the Clean Air Act — will be allowed between June 1 and Sept. 15 as a result of Biden’s action.

“The President is committed to doing everything he can to address the pain Americans are feeling at the pump as a result of Putin’s Price Hike,” the White House said. “The Administration’s strategy to spur the development of homegrown biofuels is critical to expanding Americans’ options for affordable fuel in the short-term and to building real energy independence in the long-term by reducing our reliance on fossil fuels.”

Gasoline prices, which have surged throughout Biden’s 15 months in office, hit record highs in March after Russia’s invasion of Ukraine which disrupted global energy markets dominated by Russian supplies.

The EPA rules limiting the amount of ethanol, a corn-based chemical, were implemented to reduce smog caused by the 15% blend, according to The Wall Street Journal. The Biden administration has pushed an aggressive green agenda, aiming to quickly wean the U.S. off fossil fuels over the next decade.

But industry groups suggested Tuesday that the White House isn’t focused on addressing the root issues affecting gasoline prices. In the wake of Russia’s invasion of Ukraine, drillers have repeatedly asked the administration to incentivize greater domestic production by withdrawing burdensome regulations.

“We’re concerned that the administration is not focused on the real structural problems here and is attempting to find short-term fixes that don’t get at the heart of the issue,” American Petroleum Institute’s senior vice president of policy, economics and regulatory affairs Frank Macchiarola told the WSJ.

However, the administration said the action was necessary to curb energy prices which are driving inflationary pressures higher. The Department of Labor reported Tuesday that inflation hit a new 40-year high in March.

Critics, though, also slammed the action for how it will lead to an uptick in corn demand. Food shortages have increased in recent months and high food prices have been another major factor spurring higher inflation.

“Turning more food into fuel at a time of looming global food shortages is as reprehensible as it is stupid,” Myron Ebell, the director of the Competitive Enterprise Institute’s Center for Energy and Environment, said in a statement shared with the Daily Caller News Foundation.

“The Biden administration should suspend the ethanol mandate entirely and release the several million acres of prime farmland locked up in the Conservation Reserve Program immediately so that farmers can plant additional grain crops this spring,” he added.

The action Tuesday may also face legal challenges: last year, a federal appeals court scrapped a Trump administration attempt to allow the 15% ethanol fuel mixture to be sold at pumps year-round, the Associated Press reported.

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Gas Prices Expected to Rise in 2020 Thanks to an Obscure UN Regulator

Guest Post — Mon, 21 Oct 2019 15:58:59 +0000

With gasoline prices in California eclipsing $4/gallon, Americans have taken to nervously glancing at their gas gauges. Oil prices appear to only be going in one direction (up), with dramatic disruptions such as a drone attack on Saudi refineries disrupting fuel supplies. But things may soon get far worse if the International Maritime Organization (IMO), a sub-agency of the United Nations, implements onerous worldwide restrictions on fuel content.

Starting in 2020, the IMO will require the phasing out of sulfur from ship fuels despite documented difficulties in refiners’ ability to meet strict new standards. Unless the IMO changes course, consumers across America, and all around the world, will foot the bill for higher gasoline prices as the result of global fuel shortages. If America and her allies fail to act soon to stymie the efforts of this global bureaucracy, affordable gas will soon be a thing of the past.

Like many unaccountable international governmental organizations (IGOs), the IMO is hardly noticed by the media. But the agency’s 2016 decision to ratchet down sulfur content in shipping fuels from 3.5 percent to 0.5 percent has received plenty of press and attention from analysts around the world. Environmentalists have lauded the IMO’s decision and called for eliminating scrubbers used to wash out sulfur and comply with the new standards. But the IMO and cheerleader groups fail to properly acknowledge or address the fuel shortages that will likely result from the phasing-out of sulfur.

In moving away from sulfur, shippers will likely switch en masse to alternatives such as gasoil or diesel. That’s not good news for refineries, which will face significant pressures to ramp up production of these stand-ins. Currently, there simply isn’t enough low-sulfur fuel to go around, and refineries will need to sharply increase capacity and operations in order to keep up.

Economist Philip K. Verleger notes, “As many as half of world refineries cannot produce fuel that meets the new regulation…They cannot reprocess a high-sulfur diesel fuel to a low-sulfur diesel because their facilities are inflexible.”

Worldwide regulations holding the industry back make it even more difficult for refineries to keep up with this niche, surging demand. In the US, federal fuel regulations have significantly contributed to the closure of 70 refineries since 1990. And since then, refineries have spent more than $100 billion complying with ultra-specific federal standards about which blends of fuel they are required to produce. In Europe, refinery regulation is often even stricter than in the US.

Faced with pressures to ramp up production of low-sulfur fuel and constrained by ever-expanding regulation, refineries will face major hurdles producing the gasoline required by billions to get around on a daily basis. And if ships can’t get the diesel and gasoil they need to maneuver between continents, global trade may suffer to the detriment of everybody. IMO Secretary-General Kitack Lim admitted as much on October 7, claiming “there might be some challenges” for shipping companies on particular routes.

IMO leadership, however, hasn’t exactly been eager to discuss wider market disruptions that could accompany the 2020 mandate. As Edmund Hughes, the organization’s head of air pollution and energy efficiency issues, recently admitted, “Yes there will potentially be an increase in the price of fuel oil used by shipping,” but he justified IMO policy by claiming “you pay for quality in the world.”

While Hughes’s assertion may be true, asking everyone in the world to pay drastically higher fuel and shipping costs overnight hardly seems like a practical solution to environmental issues. In fact, by creating considerable uncertainty about policy enforcement and implementation, Columbia University scholars predict that IMO 2020 regulations could “paradoxically end up slowing down what might have otherwise been a more rapid transition of the shipping market away from traditional bunker fuels.”

By working with shippers to achieve gradual, more attainable goals, the IMO could signal that it is serious about cleaning up the environment while keeping costs low. Consumers around the world deserve clean skies without having to gasp at their gas gauges, and taxpayers deserve an IGO that makes sound decisions.

Ross Marchand

Ross Marchand is the director of policy for the Taxpayers Protection Alliance.

This article was originally published on FEE.org. Read the original article.

Image: Paulo O

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