Posted on: January 29, 2013 in EPA, Renewable Fuel Standard

To the editor:

The spy thriller “Zero Dark Thirty” has been criticized for depicting the use of interrogations in the war on terror. The editorial “Zero Dark Ethanol” (January 29) tortures the facts to support the Journal’s war on biofuels — a journalistic jihad that has launched at least a dozen editorials over the past 18 months.

In the latest episode of the Journal’s reign of terror about ethanol, the editorial distorts the D.C. Circuit Court’s decision, the progress and potential for cellulosic ethanol, the federal incentives for advanced biofuels, and the past century of subsidies for Big Oil.

In spite of the Journal’s victory dance, the D.C. Circuit Court’s decision was narrow and mixed. The court rejected broad-brushed attempts to roll back the federal Renewable Fuel Standard (RFS), refused to accept the American Petroleum Institute’s arguments that the Environmental Protection Agency (EPA) can’t consider information from cellulosic (non-grain) biofuel producers in setting its projections, and gave EPA flexibility in setting cellulosic biofuel projections for the future.

I suspect that the Journal and its allies in Big Oil are really alarmed by advanced biofuels’ progress, not its supposed problems. The cellulosic biofuels sector now has facilities under development in more than 20 states. Over the last decade, enzyme costs have been reduced by 80 percent, and now cellulosic biofuels are being produced for $2.00 per gallon or less.

This progress has been possible because federal incentives have been flexible, targeted, and somewhat successful in leveling a playing field that is still heavily tilted to fossil fuels. Looking beyond the Journal’s fantasies, here are the facts: Because of the flexibility of the RFS, the EPA has waived 98 percent of the cellulose requirement. From 2010 through 2012, EPA has required only 22.95 million gallons of the 850 million gallons specified by federal law. And, yes, the EPA was right to maintain two percent of this statutory requirement as an incentive for investors to commercialize this crucial technology.   

While Big Oil and the Journal shed gushers of crocodile tears about “waiver credits,” over the past three years these credits have cost — now hold your breath — a grand total of $25 million. That’s about 53-thousandths of one percent of the gross profits for the five largest oil companies.

While the Journal channels Milton Friedman when editorializing about ethanol incentives, federal policies continue to play Santa Claus for fossil fuels, with nary a peep of protest from the free market fantasists at the Journal. From 1950 to 2010, oil and natural gas received 58 percent — or $490 billion — of the $837 billion in taxpayer subsidies to all forms of energy. In fact, fracking has been heavily subsidized, through the Section 29 production tax credit for unconventional gas.

Federal subsidies should encourage the development of emerging technologies, such as advanced biofuels, not established industries, such as Big Oil. American ethanol agreed to the abolition of the major incentive for grain ethanol at the end of 2011, while Big Oil continues to drill for subsidies from the federal fisc. Instead of torturing the facts about ethanol, the Journal’s editorial writers should direct their drones at fossilized subsidies for fossil fuels.

Bob Dinneen

President and CEO, Renewable Fuels Association

(The Renewable Fuels Association is the trade association of the U.S. ethanol industry.)

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