The Fuel Fight - Legislation Run Amok

In Issue 60 of the Turbo Diesel Register, the Editor discussed political issues concerning new fuel mileage government mandates.  And TDR Writer, Greg Whale, gave his California-based perspective on the same subject. Their comments failed to point out the large and persistent inability of the US Congress (acting through the Environmental Protection Agency) and the California legislature (acting through CARB) to enact laws with any common sense or understanding of the situation that you and I face daily. We all want clean air, but legislation is missing the mark. As Whale points out, being chauffeured around in a stretch limousine or Suburban as a legislator or government official will cause loss of touch with those who put them into office.

We certainly can’t blame government for our appetite for petroleum. That blame rests squarely on the shoulders of you and me. But, we sure can blame their lack of action and faulty action in legislation. In fact, a recent poll showed 57% of Americans feel Congress hasn’t done its job when it comes to moving meaningful energy related legislation toward becoming law. Read on.

Consider that fuel (particularly diesel fuel) costs more than ever, up about $1.80/gallon in 2008.  But there’s no move by legislative bodies to alleviate the situation except to stop the purchase of crude oil to be stored in our national reserve. This is nothing more than a ploy to grab headline attention. There’s little mention that at today’s rate, these strategic oil reserves would last barely one day. This move affected retail fuel pump prices not a whit. Each time I see this ploy, I think, “Let’s do a fuel tax holiday too!” How asinine. Earlier this year, the President asked an OPEC official to increase crude oil production to ease the price. The answer was, “Production is ample.  There is no shortage.” The lack of crude oil started the conflict between Japan and the United States known as World War II. Could it happen again?

No legislation is likely to come out of Congress until after January, 2009. Democrats, who tend to lean toward legislation promoting alternative fuels and hydrogen engine research, hope to capture both the legislative and executive branches in the November elections. Republicans, who lean toward legislation promoting added drilling and exploration of domestic oil reserves, will also try to capture a majority of seats in the November election.  Never will the two sides agree on anything anytime soon. They’re simply looking out for themselves, not for us.

The Federal Environmental Protection Agency (EPA) recently changed the standard by which city and highway fuel mileage numbers are arrived at for all vehicles sold in the United States. The revised “real world” standard is published on the window sticker of every new vehicle sold and is alleged to be a more accurate measure of the mileage (mpg) a consumer can expect.  On most large vehicles (pickup trucks, large sedans, and SUVs), the numbers stayed the same or increased slightly. Conversely, small cars took a big hit. My presumption is that these new numbers will be the ones that the government will use to measure the new Corporate Average Fleet Fuel Economy (CAFÉ) the goal of which is to be 35 mpg by the year 2020. Does the revised test now more accurately reflect “real world” use?  Nope.

How badly are small cars, the gas misers everybody now wants, being penalized with the revised EPA test? Consider this: I bought a Honda Fit in January, 2008. The window sticker showed EPA fuel economy numbers of 28 mpg city, and 34 mpg highway. For the last 9,000 miles this car has averaged in mixed city and highway driving over 40 mpg, far above its EPA combined rating of 31 mpg. The best tank average was 47 mpg, and the worst was 39.8 mpg. I consider myself to be an average driver, but apparently the EPA doesn’t.  Just think what mileage that Fit would get if it was powered by a small Turbo Diesel! I’ll buy one of those when it becomes available. By the way, I still have and drive my 2006 Dodge Turbo Diesel 3500 dually regularly because I love its size and towing power as much as ever.  And it will haul a lot more weight than an econobox.

Legislation enacted to push biofuels to the tune of a subsidy of one dollar for every gallon produced is another subject that raises my ire. Are our tax dollars doing good work? Studies that I’ve read report that biofuels have up to a 27% net energy loss, meaning it costs that much more to produce the fuel in energy consumed than the finished product provides. While the energy loss percentage can be debated, the tax subsidy is reality.  This subsidy makes this fuel a non-issue if basic supply and demand were applicable. Is Congress’ legislation and subsidy headed down the wrong road at a high rate of speed or what? This certainly can’t be called “Energy Efficiency,” but our government and the Prez can make noise that they’re leading us all to be “green.”

How about flex fuel vehicles that can burn 85% ethanol and 15% gasoline? Ethanol contains about half the heat energy per volume of gasoline. So the vehicle could get about half the number of miles-per-gallon running flex fuel as it would if burning straight gasoline. Duh! Where’s the savings? Where’s the green? But the newly enacted fuel CAFE standard will give five times credit for a vehicle that is able to burn this flex fuel, regardless whether its owner ever uses it. Duh, again! But Congress wants to look good at election time.  It’s a cinch the lobbyists had a great influence in this piece of goofy legislation.

On another front, Congress is discussing a windfall profits tax on big oil companies. This move will not encourage exploration nor lower the pump price of fuels.  And it didn’t work when congress tried it in the 1970s. The last time we embraced this particularly bad idea, the windfall profits taxes paid by big oil primarily went to pork barrel projects rather than transportation improvements. 

It is time to dismount my soapbox. Do you share the same thoughts and concerns?

The same slanted ideas drive the changes in new diesel powered trucks, including the new Dodge. The new emission standard that took effect on January 1, 2007 (and the next level called for in 2010 that Cummins has already meet) called for limiting oxides of nitrogen and particulate matter emissions from diesel engine tailpipes.  This change necessitated increasing engine size to provide equivalent power of previous models. Adding cooled exhaust gas recirculation to cut NOx emissions, adding a diesel particulate trap to cut carbon emissions (which are periodically burned off by the injection of raw diesel fuel that is exhausted from the engine to burn in the tailpipe mounted particulate trap), and a host of other changes makes the emissions 90% cleaner. These changes cut power and engine efficiency, and they make the engine run hotter.  The increased heat requires a larger radiator, cuts under-hood component life (requiring the upgrade and tuning of a whole host of engine components), and makes the engine consume more fuel through lowered efficiency and added vehicle weight. Please explain to me in logical terms how an engine that burns more fuel is good for you and me?  And please explain how the net effect of lower engine efficiency is good for our environment.

As an aside, diesel engine manufacturers and oil companies spent billions of dollars to invent the technology to meet the January 1, 2007 emissions standard. You and I are now paying for that invention, not the EPA or Congress. Congress calls such laws “unfunded mandates.” I call it “doublespeak.”

What about building new, more efficient US refineries? I’m told the seemingly endless licensing and permitting process is so complicated that it takes up to 20 years for an application to be approved, and that oil companies will spend millions to complete the process. Only then can refinery construction begin. Would it make sense to streamline this process? Could Congress do that? You bet. Have they? No. Since a new refinery hasn’t been built in nearly 30 years, and since current US refineries are running at full capacity, it wouldn’t take much of an interruption to cause a fuel availability crisis. Is this facet of the fuel problem being addressed? Likely not. It is closer to being addressed thanks to the $148/barrel crisis that occurred in July. But I don’t give real Congressional action too much hope. Ten years from now I doubt we’ll have much new to show. That’s called being “reactive” instead of “proactive.”

And why can’t we adopt the same standards used by European automakers which seem to have adopted common-sense solutions.  Their diesel engines are more efficient than ours, yielding better fuel mileage numbers by allowing slightly higher diesel NOx emissions and giving credit for less carbon dioxide emissions. I believe the answer is that the plan wasn’t invented by the EPA’s political mavens who must justify their existence and multi-million dollar funding from at budget time.  That’s a poor reason for you and me to suffer, and it lacks common sense in legislation given existing technology.  But then they don’t call Washington “foggy bottom” for nothing!

The EPA should read other government research.  TDR member, Loren Marz with the National Weather Service, did research and concluded that gasoline, gasohol, and similar fuels are much more volatile fuels than diesel fuel; and that the volatile components of those fuels emitting from refineries, fuel storage farms, fuel station tank vents, and the vapor coming from gasoline tanks that makes you turn your head as you fill up amounts to something like 450,000 ton of volatile organic compounds (VOC) going into the atmosphere every year. This substantial component of environmental fouling is not being recovered (although the technology exists to do so), and it isn’t being regulated. Has anybody in the government listened to Loren? Apparently not. He’s an informed, common sense guy.  And all of his family vehicles efficiently use much less volatile diesel fuel.

This article wouldn’t be complete without suggestions for solutions.

First, cut out the dollar per gallon federal subsidy for any alternative energy source that costs more in energy to produce than the product provides. Instead, provide direct grants for technologies that produce net energy gains and for promising research that reaches the same goal.

Second, to encourage less dependence on foreign oil, provide tax credits to US companies to be applied against active search and drilling costs that bring new wells and oil fields into production. The credits would be given only after on-site field inspections and proper documentation proving efficient work and use of grant monies, and they should be limited to three to five years.

Third, rather than institute a windfall profits tax on big oil, Congress could require a portion of gross profits be used for research, exploration, and increasing production efficiency and capacity. This legislation should expire after ten years.

Finally, tough legislation must quickly be enacted to stop or limit commodities speculators, particularly traders outside the US from influencing the market price of US petroleum they don’t even own. At present, commodities speculators account for up to 40% of crude oil’s price depending on which market analyst you listen to.

Current legislation, or lack thereof, is driven by politics, not common sense. When a bunch of politicos, including EPA’s elected or appointed managers, write faulty legislation without heeding informed input from independent scientists who understand the problem, we should know we’re in for some shoddy treatment. Enjoy the ride!? And remember to cast your informed vote in November because each and every one of us is an admittedly very small part of the legislative process.

“There ain’t no answer. There ain’t gonna’ be any answer. There never has been an answer. That’s the answer.”  –Gertrude Stein, American Author (1874-1946).

Jim Anderson

TDR Writer