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Fined for Failing to Do the Impossible

Back in 2007, Congress created a biofuels mandate under which oil companies are required to use a minimum amount of cellulosic ethanol each year.  The mandate was supposed to encourage the development of a domestic cellulosic ethanol industry.  This has not happened.  Several years after the mandate was imposed, there is still no commercial cellulosic ethanol production.  This gets the oil companies off the hook, right?  Nope.  As the New York Times reports, companies are still paying fines, totaling nearly $7 million, for failing to meet a blending quota for a substance that does not exist.  Were that not bad enough, this year the cellulosic ethanol quota will increase, as will the fines for failing to meet it.

Who would defend mandating the use of a substance that, for all practical purposes, does not exist?  Not the renewable fuel industry.  As the NYT reports, they acknowledge that commercial production of cellulosic ethanol remains years away.

“From a taxpayer/consumer standpoint, it doesn’t seem to make a lot of sense that we would require blenders to pay fines or fees or whatever for stuff that literally isn’t available,” said Dennis V. McGinn, a retired vice admiral who serves on the American Council on Renewable Energy.

The EPA, on the other hand, defends the mandate:

Cathy Milbourn, an E.P.A. spokeswoman, said that her agency still believed that the 8.65-million-gallon quota for cellulosic ethanol for 2012 was “reasonably attainable.” By setting a quota, she added, “we avoid a situation where real cellulosic biofuel production exceeds the mandated volume,” which would weaken demand.

AEI’s Ken Green has trouble making sense of the EPA’s rationalization:

So what’s most important about biofuel quotas is that they prevent us from over-producing a product that we can’t produce so we don’t weaken demand for the product that the government mandates we use.

As Green notes, Congress might as well have mandated oil companies blend gasoline with rainbows and unicorn sweat.

Originally posted at The Volokh Conspiracy.

Comments

  1. This way they can be flagellating the oil companies while the oil companies are buying redemption for chump change.

  2. That is, they pretend to be flagellating the oil companies.

  3. poorhardworker says:

    And people wonder why companies are leaving the US…fining companies for not producing a product that does not even exist…ludicrous and wrong!

  4. Yes there is. Abengoa Energy, Dupont, Gulfcoast Energy, and many more all produce it.

  5. Brian Mahany says:

    TALK ABOUT AN OUTRAGE!
    That’s no more unfair, or moronic then making the energy customers of Progress
    Electric FL. pay in ADVANCE for a new nuclear power facility that has as yet, even
    broken ground, nor has any construction even began, which may in fact, be years
    down the road. In fact, a lot of the elderly consumers now paying in advance for this “projected” facility will not even be around to utilize the energy produced by this facility by the time it gets built, if it ever even see’s the light of day, sometime in the future.

  6. I’m not at all an expert on things magical, so I could be wrong, but I’m pretty sure that unicorn sweat is a combustion inhibitor. You wouldn’t want to mix unicorn sweat into your gasoline. 🙂

    • RationalGeezer says:

      Perhaps they meant Fairy Dust. Fairy Dust can enhance combustion or, for that matter, do anything you imagine it to do. Perhaps we need to rename the EPA the FDA – Fairy Dust Administration.

      Remove the usurper.

      RationalGeezer

      • seonome January 23, 2009 Did you base number 8 entirely on that Yahoo! Answers thing? Because Yahoo! Answers is clogged with the stupidest people capable of using the internet.Some memorable questions include “How do I scan a mirror and use it as my background”, “Where can I find scuba-diving equipment for my horse” and “I heard on TV that there’s a war in Georgia, when do we evacuate” (The person lived in the state Georgia of the US, the war was in the country Georgia halfway across the world.) It’s also likely that a lot of the people there are being asses on purpose.Yeah, this post’s main purpose was just to rant on Yahoo! Answers ) But I think our reputation is more on being ignorant and too prideful. Not to mention kurakot.

      • YpyFdf rzmobqzzpyrx

  7. the epa is on drugs just like the rest of the government. next the epa will want us to go back to the moon for some stupid idea that we can use moon rocks for cleaner energy. scary thing that a country like us could have the most insane people in these jobs.does rick perry come to mind. how could this guy become the governer of texas?maybe the people at the epa are all related to ricky boy.

  8. Yes “Kingdom,” this example is exactly why we are all so looking forward to the governments new “Obamacare” law kicking in. Our energy problems are so minor when compared to the coming health care changes. No rational person could make up, even in their wildest dreams, the insanity flooding out of Washington, DC.

Trackbacks

  1. […] you read Jonathan Adler’s post at the Volokh Conspiracy (and reposted at PERC’s Percolator blog), it makes the EPA seem a little silly for insisting on fining companies when it would be […]

  2. […] Read full article… icBeacon('investmentwatchblog'); Be Sociable, Share! Tweet(function() {var s = document.createElement('SCRIPT'), s1 = document.getElementsByTagName('SCRIPT')[0];s.type = 'text/javascript';s.async = true;s.src = 'http://widgets.digg.com/buttons.js';s1.parentNode.insertBefore(s, s1);})(); January 26th, 2012 | […]

  3. […] Here’s a story that even better illustrates the insanity of those running the US. Oil companies (who provide the life blood of the economy on very small profit margins (If you’re unaware of this truth you probably don’t believe it because of the media/politician spin, but look it up yourself)…Anyways, these oil companies are being fined for not doing the impossible.  The US government says they must do a certain thing that no one on the planet has ever done…or they will pay fines.  So they pay fines…which means you pay higher costs for everything you buy. […]