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Biodiesel producers rejoice at new mandate for 2013

The renewable energy industry is applauding President Obama and the U.S. Environmental Protection Agency after the EPA approved a 28% increase in the amount of biodiesel mandated for use in trucks on the nation's highways for 2013. Biodiesel is made in a process that uses soybeans, while the production of ethanol is based on corn.
 
The president of the Iowa Renewable Fuels Association, Brad Albin, said, "I want to thank President Obama and his staff for listening to our concerns and recognizing the value and potential of America’s Advanced Biofuel—biodiesel.”
 
The biodiesel industry is celebrating because unlike mandates for the use of ethanol in the nation's fuel set forth in the 2007 Renewable Fuels Act, biodiesel didn't have a mandate until last year. That mandates set a goal of 800 million gallons. The new mandate for 2013 has been expanded to 1 billion gallons, and fell short of the 1.28 billion gallons that biodiesel producers wanted.
 
“This was an incredibly important decision, and the Obama Administration got it right,” said Joe Jobe, CEO of the National Biodiesel Board, the industry trade association.
 
“It will allow biodiesel plants across the country to invest and expand, creating thousands of jobs. At the same time, it sends a strong signal that the U.S. is standing firm behind its commitment to producing clean, American-made energy to strengthen our energy security and break our dependence on petroleum.”
 
When the mandate was introduced in 2011 at 800 million gallons, it helped prevent the closure of several of the nation's biodiesel plants.

Ethanol production has come under fire for driving up prices on the food crop, however, there is no indication that the same will happen for soybeans. 

Source: Desmoines Register



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RE: Unlike E-85, Biodiesel makes sense
By dlapine on 9/19/2012 3:20:07 PM , Rating: 2
Pretty sure you're comparing apples to oranges.

The point of a government subsidy an industry is to ensure that that industry survives in the face of a compelling pubic interest during a period of economic decline.

Kinda like how the Navy pays extra to have 2 manufacturers of aircraft carriers or submarines available now. It would be cheaper to just pay the best one, but it's in the public interest to keep two for various reasons.

There's absolutely no reason to pay profitable oil companies extra money to continue doing what they already do.

The appropriate quantity to compare here is how much money it will take to keep these industries in business for the duration of public need. For the Oil companies, that amount is $0. For the newly formed renewable energy companies, that amount is not $0.

The issue of subsidies is moot to this article anyways, as the article is about the mandated use of American-produced bio fuel.


By Solandri on 9/19/2012 11:51:20 PM , Rating: 2
The vast majority of the subsidies for oil companies goes towards new oil extraction techniques like shale oil. It's not money given to them to do what they're already doing as you're theorizing. They're new technologies being developed, and thus they're being subsidized.

I actually think subsidizing most of these oil extraction techniques (and "clean coal") are a mistake, as the price point where they become cost-effective is so high they'd only really be useful if oil permanently settled at $120+/bbl. Why subsidize research of a technique which will provide oil at $100/bbl, when you can subsidize research which can provide, say, $50/bbl equivalent?

But from a purely financial standpoint, it's an apples to apples comparison. Subsidies are going to new energy generation technologies, whether it be solar, wind, or oil.

quote:
The point of a government subsidy an industry is to ensure that that industry survives in the face of a compelling pubic interest during a period of economic decline.

No it's not. The point of a subsidy is to promote R&D (and maybe production) into a method or technology above and beyond levels dictated by simple market forces. That is, you subsidize something because you want to accelerate its development. Not because you want to keep some company around. The goal is new technology, not the survival of some company.


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