Dubya says no to wholesale electricity price caps and then says yep. He says no to California Gov. Gray Davis' request to take oxygenates out of California gasoline and then a deputy administrator at the Environmental Protection Agency says oxygenates requirements may be outdated.
Hardly a week after Bush told Davis “Sorry Charlie,” Linda Fisher of EPA told the Senate Energy and Natural Resources Committee that the federal reformulated gasoline program has resulted in some refiners making cleaner burning fuels — so clean, they do not need MTBE, ethanol or any oxygen to make them burn clean enough to meet federal clean air standards.
That is what California told Dubya. The President said he did not believe Davis.
Oh the politics of energy.
It was a political decision Bush made. He wants to wrap Davis' knuckles because California went for the other guy in the last election.
Saying no to Davis also was a political plum for the nation's grain growers, particularly corn producers who were jumping for joy when Dubya said no. Dubya's decision almost instantly created a brand new 600-million-gallon ethanol market that would consume 230 million bushes of corn. It represented a $1 billion windfall for the nation's corn crop.
Bush's decision put the earthmovers into high gear with starts of new ethanol plants. According to producer-group statistics, there are 56 farmer-owned U.S. facilities producing more than 2 billion gallons of ethanol annually. That capacity is expected to increase to 3.5 billion gallons per year by the end of 2003.
There is more than enough feedstock corn for these plants with corn stocks now exceeding 1.7 billion bushels. Corn growers say there will be enough capacity to meet California's demand and gas prices in the state will not increase because of the huge, virtually overnight increase in ethanol demand.
They say they can get it to California where there are plenty of tanks to hold it and any increase in California's gas prices will be California's own fault or the fault of the refiners.
Yea, and if you believe that there is some swampland in Florida I'd like to talk to you about. How about a bridge to Brooklyn instead? When it comes to energy, Californians don't believe anyone.
This ethanol debate is no simple one. Certainly, increasing ethanol production from surplus grain at a time when farm income is in the pits is a no-brainer. As Five Points, Calif., producer John Diener pointed out at the recent House ag subcommittee hearing, farmers cannot sell products overseas because of the high value of dollar. Therefore, markets have to be found at home. There is no better market than using grain to produce ethanol and sell the ethanol to refiners.
It would raise commodity prices and reduce government economic support of agriculture. It would also reduce economic pressure on other crops.
What is hard to get around is the inequity involved in the debate over MTBS and ethanol and the federal clean air standards. There are about a dozen other states that demand refiners oxygenate fuel. Those states also are banning the additive MTBE, leaving ethanol as the only alternative.
Like California, these states are facing down the barrel of the clean air act and are being forced to use MTBE's only alternative. It is a squeeze not necessarily applied equally to all states.
Ethanol should not be a political fuel. It should be mandated for all states, not just those where environmental conditions or populations are causing air pollution problems.
It makes sense not only because of the positive implications within agriculture, but also because it can reduce the dependency on foreign oil.
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