Jason Barton

Professional Information and Energy News

EPA Proposes Increased Bureaucracy

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Is this proposed legislation going to improve working conditions or environmental impact at sugarcane and ethanol production facilities, or is it just more paperwork? I’ve written extensively on this site and in my doctoral dissertation about these issues, as well double fuel pumpsas related policies, but it’s not clear the intent of the proposed legislation. Whatever it is, demand for imported ethanol has taken various swings over the last few years, not due to natural factors, but due to the EPA’s decisions.

When the US EPA allowed Brazilian sugarcane ethanol to meet the “advanced biofuels” requirement in 2010, it certified, according to their analysis, that cane ethanol reduces greenhouse gas (GHG) emissions by at least 50% (61%) over traditional, petroleum gasoline. This comes after much debate regarding the actual GHG emissions from sugarcane, corn, and cellulosic ethanol.

When the EPA made their decision on this debate, it significantly increased demand for Brazilian cane ethanol as US refiners worked to meet the advanced biofuel mandate. The EPA, however, lowered the volume on this mandate due to lagging development of domestic, cellulosic ethanol that would also satisfy the advanced mandate.

Now, according to the article below, that increased demand could be dampened, and the number of producers reduced to only the largest players, as meeting the new reporting requirements increases transactions costs. Policy fluctuations like these have made it very difficult for investors in Brazil since the prices they earn for their product are not subject to natural factors of supply and demand, but due to the whims of bureaucrats in Washington.

Reuters

 

 

 

By Cezary Podkul

NEW YORK, July 12 | Fri Jul 12, 2013 10:13pm BST

 

(Reuters) – Importing cheap Brazilian ethanol into the United States could become much less profitable next year if a proposal by the Environmental Protection Agency to expand tough documentation and transportation rules to non-U.S. producers takes effect.

The proposal, made on June 14, could seriously disrupt a signature Latin American energy trade, triggering auditing, documentation and transportation requirements, including physically separating U.S. ethanol imports from each other until those requirements are met.

Read the entire article here.