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EPA Smog Ethanol

October, 2006

The Chicago Tribune recently ran a story stating that the Environmental Protection Agency (EPA) was going to relax pollution rules for new ethanol production plants in the US. This action by way of changing the way those plants are permitted to operate under the Clean Air Act. Existing rules quantify plants such as ethanol production facilities as major source of pollution if they emit more than 100 tons of toxic chemicals per year. Once determined to be a 'major polluter', these plants are subject to certain restrictions which include being forced to install pollution elimination equipment and, and an intensive permit process. The pollution elimination equipment is required to remove nearly 95% of the polluting emissions.

The proposed changes, once in effect, would mean that ethanol plants would not be subject to these federal requirements unless they emitted more than twice the current amount of pollutants. The author of the Chicago Tribune article reports that (new) ethanol plants are expected to produce slightly less than 250 tons of pollutants per year. This might seem to be unfair as other, current plants producing an equivalent amount of pollutants would be required to reduce the expelled amount to some 10 tons while a new ethanol plant would not have to do so. Granted, ethanol production, once it becomes less expensive could be worthwhile but, is the exchange for polluting our environment worth the trade off?

Oil prices have fallen some 25 percent since mid-July's record high of $78.40 which is a welcome trend for consumers but, OPEC apparently wants to keep the price as high as possible. The cost per barrel of oil had dropped to around $56 per barrel and OPEC began curbing production in order to get the price going back up. OPEC wasn't scheduled to have another meeting until December of 2006 but, the recent low in prices spurred them into more immediate action and they scheduled an emergency meeting on October 19, 2006. The main agenda for the meeting. cuts in daily production of 1 million barrels per day, the first cutback in production since April, 2004. This action was left as open ended statement, meaning that further cuts in production could be incurred by the end of the year 2006.

The summer of 2006 saw an all time high in gasoline prices and increased attention in alternative fuels such as E85. OPEC wants to keep oil prices high enough to allow them to continue future production yet, low enough that countries like the US won't be overly concerned with finding alternative fuel sources. OPEC probably considers this method to be a good business practice and if it were any business in North America, you might agree but, this is not the case. A term that comes to mind is exploitation; these foreign countries are exercising a method that simply keeps them in at a level of control. The higher oil prices we experienced stirred up a higher interest in ethanol production in the US and OPEC doesn't want us to stray from buying their overpriced oil, especially when you factor in how cheaply they sell the same refined gasoline in their own countries.

America, and other countries that are buying foreign oil need to band together and develop our own resources whether it be additional exploration and drilling for oil or creating better methods for producing alternative, renewable fuels. It is well beyond time for us to step back from OPEC and say we don't have to pay your high prices for oil, and we won't do it anymore. Why are we so ready to continue paying these other countries for something we can do ourselves - is it simply because we don't have the drive to get off of our collective butts or because having it so readily available is easy?

Gov. Brian Schweitzer of Montana says we should eliminate the middleman. A system where the U.S. sends food to a Third World country and buys oil from that same country is wrong and we should make fuel from that food stock. Most people and Biofuel proponents alike can see the economic benefits and potential of reduced dependency on foreign oil. Critics wonder about the inefficiency of biofuel and question whether if it's worth protecting against global market forces. No doubt there are economic gains to be realized with increased biofuel manufacturing, but experts warn biofuel production must match demand or it could become another form of corporate welfare. Schweitzer's proposal has been called extreme and protectionist by some analysts. Stopping food exports and lowering oil imports could affect food and energy prices around the world, so the transition away from foreign oil should be slow to avoid shocking the system.

 Related:
 Exxon Environmental Fines
 Kroger in Texas Selling E85
 OPEC and the Cost Per Barrel
 Ethanol Futures
 To Flex or Not To Flex Part 1
 Tax Credit for FFV Purchase


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