Tuesday, June 20, 2006

"Confidential" EPA report to President Bush: Mr. President, you're WRONG about clean fuels!

On April 25, with his ratings plummeting and desperate to find a scapegoat for high gasoline prices, President Bush asserted that so-called boutique fuels were harming consumers by pushing up gas prices. [See below, excerpt from the President’s April speech before the Renewable Fuels Association]

The President called on EPA Administrator Steve Johnson to convene a task force of the nation’s governors to come up with ways to “simplify the process for the sake of our consumers.”

Well, the task force met. It deliberated. And now it has produced the attached “confidential” draft report, which concludes, basically, that President Bush was dead wrong!

The draft report concludes that special state clean fuels “have provided significant, cost-effective air quality improvements,” and that EPA could find absolutely no hard evidence to show that these fuels either cause higher prices OR “present unusual distribution problems.” Since the President appeared to have prejudged the outcome of this report, normally you’d think bureaucratic pressure would be brought to conform to the President’s wishes.

As the draft went into circulation, Rep. Joe Barton (R-TX) put off plans to promote new legislation that would limit “boutique fuels.” It is not clear that Barton or his staff had read the “confidential” report.

Several things are clear, however: clean fuels are a very cost-effective way to help clean up the air. And it would be a dumb mistake to further limit state authority to adopt clean fuels without some way of compensating for possible pollution problems.

Please note, below, highlights from the draft report. Below that are excerpts of the President’s April 25 speech that led to the creation of the task force.

[“Confidential” task force excepts]

It is clear that state fuel programs have provided significant, cost-effective air quality
improvements. Any actions to modify the slate of existing boutique fuels or limit a
state’s ability to adopt fuel specifications must be done in a manner that at least
maintains these air quality gains and avoids unnecessarily restricting state authority…

As part of the analyses of future fuel options, careful consideration should be given to
the possibility of new legislative authority which would allow for the adoption of
regional clean fuel programs. Cleaner burning fuels used in the broader geographic
areas merit further study as an option for addressing fuel supply and fungibility

A critical issue for the states is that any change in the boutique fuel slate or
applicable authorities must be done in a manner that air quality benefits resulting from
boutique fuel programs will, at a minimum, at least be maintained. Benefits from these
programs have served an important role in the states’ efforts at meeting national air
quality standards, and these benefits are expected to be as important to future attainment
strategies. Further, while the task force received some input from industry stakeholders
suggesting a potential connection between boutique fuels and supply or price concerns,
this input was not supported by any documentation and EPA's review did not reveal any
studies or empirical data confirming that boutique fuels presently contribute to higher fuel prices or present unusual distribution problems.
Prior assessments have shown very small impacts on the cost of production of boutique fuels.


President Bush, before the Renewable Fuels Association:

We also need to confront the larger problem of too many localized fuel blends,
which are called boutique fuels. The number of boutique fuels has expanded rapidly over
the years, and America now has an uncoordinated and overly complex set of fuel rules.
And when you have a uncoordinated, overly complex set of fuel rules, it tends to cause
the price to go up.

And so I'm asking Director -- directing Administrator Johnson to bring the governors
together to form a task force on boutique fuels. And the mission of this task force will be
to find ways to reduce the number of boutique fuels and to increase cooperation between
states on gasoline supply decisions. I want to simplify the process for the sake of our
consumers. And then I'm asking them to get these recommendations to my desk, and I
look forward to working with the United States Congress to simplify the process.

1 comment:

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