Refiners Pay $Millions in Fines For Not Using Nonexistent Fuel. #rsrh

A Fine for Not Using a Biofuel That Doesn’t Exist

WASHINGTON — When the companies that supply motor fuel close the books on 2011, they will pay about $6.8 million in penalties to the Treasury because they failed to mix a special type of biofuel into their gasoline and diesel as required by law.

But there was none to be had. Outside a handful of laboratories and workshops, the ingredient, cellulosic biofuel, does not exist.

In 2012, the oil companies expect to pay even higher penalties for failing to blend in the fuel, which is made from wood chips or the inedible parts of plants like corncobs. Refiners were required to blend 6.6 million gallons into gasoline and diesel in 2011 and face a quota of 8.65 million gallons this year.

“It belies logic,” Charles T. Drevna, the president of the National Petrochemicals and Refiners Association, said of the 2011 quota. And raising the quota for 2012 when there is no production makes even less sense, he said.

How much is the fine for not burning unicorn farts?

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In the Interest of Full Disclosure…

On Wednesday, January 5, the American Petroleum Institute hosted a luncheon/press conference in Washington, DC, to roll out its 2012 “State of American Energy” report. I was among a group of bloggers who were invited to attend as API’s guest. API paid for my travel, lodging and meals; the only condition of this arrangement was disclosure if I should decide to use the API materials or presentation as a source.

I am under no obligation to write anything about the API or the SOAE. Any opinions are mine alone.

[Update 5/5/2012]: I should add that my employer is not a member of the API, although some of the folks I work with are active with the local chapter.

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More Mush from the Times

In a New York Times editorial celebrating the recent demise of the ethanol subsidy, the Old Grey Lady once again descends into outright falsehood to malign the industry that liberals love to hate:

Congress should now focus on the oil industry, which has long enjoyed a web of arcane and unnecessary tax breaks — deductions for well depletion and intangible drilling costs. They are unique to the industry and, when combined with other subsidies, cost roughly $4 billion a year.

President Obama has tried twice to kill these subsidies, without success. We hope he tries again in his coming Budget Message. The Congressional Research Service says that ending the subsidies would have no effect on gas prices for consumers and only a trivial effect on industry profits, which have been at record highs. [Emphasis added.]

Where to begin?
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Gas Prices Reach New Highs as Gas Prices Hit Record Low

On an annual basis, retail gasoline prices hit an all-time high in 2011. The average price for all grades was $3.576 per gallon, vs $3.299 in 2008.

Meanwhile, the shale gas revolution has set the stage for declining prices per mmbtu of natural gas.

Natural gas spot prices. Source: http://www.eia.gov.

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Retail Gasoline Prices Reach All-Time High

On an annual basis, retail gasoline prices hit an all-time high in 2011. The average price for all grades was $3.576 per gallon, vs $3.299 in 2008.

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Natural Gas Absurdity Roundup

1. Despite a natural gas drilling moratorium in New York, that state’s Chemung and Broome Counties are feeling the economic lift from drilling next door in Pennsylvania. But to the New York Times, the ex-pat workers, largely from Texas, Oklahoma and Louisiana, have awfully low-brow tastes, don’t you know. (NYT link below the fold.)

2a & 2b. The Daily Beast seems to have turned over reporting on energy issues to complete idiots. They should stick with things they do best, like candid upskirt photos of the Kardashian sisters. (Two DB links below the fold.)

3. Betty Sutliff is a member of the Upper Wayne County Property Owners Alliance. Her northeastern Pennsylvania county is prospective for Marcellus gas development, but a board called the Delaware River Basin Commission (representing New York, Delaware, New Jersey, Pennsylvania and the U.S. government) has blocked development. In addition an influx of well-heeled interlopers who own second homes in NE PA are vocal in their anti-gas rhetoric, although they have almost no skin in the game.

There exists a minority of those who vehemently oppose natural gas development. They would oppose it if it were 200% safe.  For this group it really isn’t a question of safety.  Instead,  it is a new ideology aimed against anything fossil.  Simplistically, these folks look at any fossil fuel development as an addiction that should be conquered “cold turkey.”

Most of these individuals own very little land and think (mistakenly, as UGI [retail natural gas price cut] demonstrates) they have nothing to gain economically from natural gas exploration and production.  They also are  typically residents who do not reside here full-time or have moved to the area after living elsewhere.  They don’t want their peace and serenity, not to mention their viewscape, tampered with at all for any reason.

However well-funded, well organized, and vocal they may be, they do not speak for the majority of residents here who have called this area home for generations.  This is noticeable by the landslide victories of  pro gas candidates in local elections which show the majority of people in favor of moving forward with exploration and production of natural gas.

Well said, Ms. Sutliff. The loudest voices in the debate are the ones with the least knowledge and the least stake in the game. And they would be the first one to cry “Conspiracy!” if the cost to heat their home doubled, or if there were no gas available at all.

These elitists portray natural gas as bad for the environment (a very tenuous position), but in reality they know that cheap gas is the #1 enemy of their Mother Gaia-approved alternatives.

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#1 U.S. export? Gasoline, diesel & jet fuel, believe it or not. #rsrh

In a first, gas and other fuels are top US export

NEW YORK (AP) — For the first time, the top export of the United States, the world’s biggest gas guzzler, is — wait for it — fuel.

Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel than any other single export, according to U.S. Census data going back to 1990. It will also be the first year in more than 60 that America has been a net exporter of these fuels.

Just how big of a shift is this? A decade ago, fuel wasn’t even among the top 25 exports. And for the last five years, America’s top export was aircraft.

The trend is significant because for decades the U.S. has relied on huge imports of fuel from Europe in order to meet demand. It only reinforced the image of America as an energy hog. And up until a few years ago, whenever gasoline prices climbed, there were complaints in Congress that U.S. refiners were not growing quickly enough to satisfy domestic demand; that controversy would appear to be over.

Still, the U.S. is nowhere close to energy independence. America is still the world’s largest importer of crude oil. From January to October, the country imported 2.7 billion barrels of oil worth roughly $280 billion.

(Emphasis added.)

The U.S. is also the #3 producer of oil, despite controlling only 2% of the world’s reserves. </snark>

For a good while, commenters on my diaries refused to believe that the problem with energy prices was not limited access, or overregulation, or hostile government policies. No, the problem was not enough refineries. I hope that canard has quacked its last.

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Chart of the Day #rsrh

Natural gas spot prices. Source: http://www.eia.gov.

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Giant Mercedes Limo Rally in Pyongyang

H/T @jstrevino via twitter

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American Presidents in Uniform

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