Backdoor Tax on Gasoline Masquerades as Green Energy Investment?
Imagine if the government passed a law requiring you to purchase either a specified number of pink elephants or government-issued “pink elephant credits.” This is, in essence, what the government is doing to oil companies: requiring them to purchase a nonexistent product or purchase credits for a nonexistent product.
The seeds of this nonsensical policy were sown in 2007, when President George W. Bush signed the Energy Independence and Security Act into law, which required oil companies, starting in 2010, to purchase a specified volume of cellulosic biofuels, or fuel made from non-food crops and plant matter. The fuels were intended to be mixed with conventional gasoline, thereby ostensibly reducing environmental pollution.
The only problem is, not a single gallon of cellulosic biofuel has been brought to market. According an October 14, 2010 report by the Congressional Research Service, “Significant hurdles must be overcome before commercial-scale production can occur.” It’s a shame the Environmental Protection Agency (EPA) didn’t take that piece of wisdom into account when it began putting the mandate into effect.
In 2011, the EPA did respond to this lack of production by reducing its mandate from 500 million gallons to 6.6 million gallons. However, even this relatively meager demand could not be met by the fledgling cellulosic biofuel industry, and oil companies have been forced to purchase EPA-issued “waiver credits” in lieu of the actual fuels.
The industry has so far received well over $1 billion taxpayer dollars in the form of grants, subsidized loans, and tax credits. You would think that with all of these subsidies, the cellulosic biofuel industry would have brought at least a few gallons to market.
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