I will participate in another API conference call on energy issues on April 18th, and I would like to solicit questions from readers. The topic will be “Energy and the Environment”, but I am sure they will take any energy-related questions. The speaker will be API CEO Red Cavaney.
I wrote up my impressions of the previous conference call here. You can read the transcript from the first call here along with an audio recording at the API’s Energy Tomorrow site.
If you get a chance, read the transcript or listen to the audio recording. This may prompt some questions. I will try to get as many answered as possible, and then I will write up the results. Don’t miss this opportunity to have your questions/concerns addressed. If you have one, please list it. First come, first served.
Questions:
1. One could argue that the current focus of alternative energy proposals is more to benefit agriculture than to make a significant contribution in terms of supplying a new energy source. Given the agricultural lobby’s substantial political power, this is very understandable. Somebody should get the message out there that producing fuel from food does not make sense. A much better alternative would be to use waste products as a feedstock. Unfortunately the waste lobby does not seem very powerful. Do you agree with this argument? If you do, what actions are API taking to explain this message to Washington DC?
2. Also related to alternative fuels. It seems that Congress and the White House think they can correctly predict what the fuel of the future would be. Early in the Bush administration that fuel was hydrogen. Now it is ethanol. Perhaps biobutanol or biodiesel would be next. In reality, nobody knows what the fuel of the future would be. If one has to have a bias, it can be argued that that bias should be toward existing fuels (gasoline and diesel) or fuels that can be blended with these existing fuels without changing physical properties or percluding the use of existing infrastructure (as ethanol does). For example, it is possible to convert biomass into green diesel, which makes integration of the biofuel into existing fuel supplies a non-issue. Would you agree? As with the previous question, this centers on API’s role in educating and informing lawmakers as well as challenging some of the assumptions that seem to be ingrained in the energy discussion in Washington DC.
I have one as well. I will write it down here so I don’t forget it.
Given that ethanol usage in the U.S. is mandated, why does it require a subsidy? Also, some argue that the ethanol subsidy is really an oil company subsidy, given that they are the actual recipients of the blender’s credit. How do you respond to that? (I know how I respond; just look at the groups lobbying to keep the credit and you know who is truly benefiting).
Cheers, Robert
Hi Robert, optimist,
seems to me from this article that Mr Cavaney himself quite likes ethanol?
Presentation by API President and CEO Red Cavaney
USDA Agricultural Outlook Forum 2007
Panel: “Renewable Energy – Inroads to Agriculture”
March 1, 2007
API Highlights Joint Efforts to Increase Ethanol Use
Bill Bush | 202.682.8069 | bushw@api.org
WASHINGTON – API today called attention to the cooperative efforts of the oil and natural gas industry and ethanol/agricultural interests in dramatically increasing use of ethanol to meet the transportation fuel needs of U.S. consumers.
“Thanks to the almost seamless transition of huge amounts of ethanol into our nation’s gasoline pool, ethanol is gaining broader consumer acceptance,” said API President and CEO Red Cavaney in remarks at the U.S. Department of Agriculture’s Agricultural Outlook Forum 2007 in Arlington, Virginia. “From our experience, we know that customer acceptance is the single most important factor in the success of a product, especially a transportation fuel,” he said. “It is ever more essential that we work together to maintain and build the consumer acceptance of ethanol.”
Cavaney said that API and its member companies believe that allowing market forces and consumer preferences to determine where and how ethanol is consumed is the most effective and least costly way to integrate ethanol into our nation’s transportation fuels system.
“Last year, our industry utilized 25 percent more than the target amount of ethanol established under the RFS (Renewable Fuels Standard),” he said. “Additionally, nearly 50 percent of all gasoline consumed in the U.S. now includes ethanol. Clearly, there is a bright future for ethanol, as well as for biodiesel, although the latter is starting from a smaller base. We look forward to the promise of an ever-growing relationship between our two industries in the years ahead.”
Cavaney concluded: “I hope to return to this forum in a subsequent year to report to you on our continued, constructive collaboration on behalf of the U.S. motor fuels consumer. Working together, we can all play an important role in addressing our nation’s energy security. Few endeavors could be more important.”
http://www.api.org/Newsroom/upload/RED_USDA_forum_rev.pdf
I think it is largely irrelevant whether Red Cavaney likes ethanol or not. He has a limited ability to increase its use if he likes it. He can hardly stop it, if he does not like it. So, I suspect he is doing the PC thing: showering praise on ethanol.
Far more significant is this comment: Cavaney said that API and its member companies believe that allowing market forces and consumer preferences to determine where and how ethanol is consumed is the most effective and least costly way to integrate ethanol into our nation’s transportation fuels system. He is asking the feds to back off. If they do, I doubt that ethanol can continue to penetrate the market, based on its properties and profitability alone.
Here is another question for Cavaney:
4. If API (or one of its members) where to invent a fuel oxygenate that did not share the negative properties of MTBE, would API support its use? Such an oxygenate would compete with ethanol, and may, in certain conditions be much cheaper to produce, and easier to scale-up to meet requirements. Please comment.
Hi Robert,
Many thanks, and I just edited (and added on to) my qs over at TOD. The final version is framed in terms of the environment, specifically. So,just wanted to let you know, in the hopes my qs will pass muster and be included.
Aniya
Why is the american petroleum institute rapeing the public,with high pump prices?