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Is EPA Ethanol Mandate a Joke?
By Mr Ethanol | December 4, 2007
Seeking Alpha:
Why “mandate” that refiners use less ethanol they are already using? Shouldn’t a “mandate” require that they use more than they already are? Isn’t that the point? Regulators on Tuesday set the new renewable fuels standard of nearly 4.7% for next year to meet a federal mandate that at least 5.4 billion gallons of ethanol be blended into transportation gasoline in 2008.
The standard for 2007 was slightly more than 4%, which amounted to roughly 4.7 billion gallons, according to the Environmental Protection Agency. The volume target increases every year until reaching 7.5 billion gallons in 2012. Why is this a joke? The U.S. currently has 134 operating ethanol plants with a total capacity of 7.2 billion gallons. That means the “mandate” could have been raised another 20% to 30% and current capacity could have easily handled it.
With producers like ADM (ADM) currently undergoing capacity upgrades that will have it producing 1.6 billion gallons itself annually, if congress and the EPA are indeed serious about making a dent in our oil consumption and the strangle hold it has on us, more aggressive targets are required. Verasun (VSE) has put expansion on hold chiefly due to uncertainty over Congressional legislation.
The industry is currently subdued after it meteoric rise in early 2006. Read full article.
Topics: Ecology, Ethanol, Legislative |
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