With the Middle East crisis threatening to drive-up the cost of oil and gas
even further, consumers should not overlook the underlying costs of the MTBE
and ethanol gasoline additive fiasco.
It has been reported that the projected clean-up of MTBE will
cost $29 billion nationally, which will cost consumers 22 cents per gallon,
and that the cost of replacing MTBE with ethanol will drive the cost of
gasoline even higher - some say as high as $3.00 per gallon.
Serious questions about MTBE and ethanol should be answered, and those
responsible should be held accountable. First, how could MTBE have been
approved as a gasoline additive, especially in the environmentally-conscious
State of California, without testing it for water contamination, not to
mention the unknown health risks from breathing it, before and after
combustion? Why didn't the state and federal environmental protection
agencies catch it and prohibit it to begin with? And why did California
Governor Gray Davis extend the elimination of MTBE from gasoline
from 2002 to 2004?
When MTBE is removed, it will be replaced with ethanol corn squeezings,
which costs even more to refine and doesn't save any oil because it takes
nearly as much oil to refine ethanol as it replaces, so the renewable energy
argument for ethanol is redundant. And, like with MTBE, there are
unanswered questions about the health risks of ethanol. Even though the
ethanol additive produces less carbon monoxide, it produces more smog, which
causes more asthma, other respiratory health problems and cancer.
The big question is, when are we going to say "enough" to the inept,
meddling idiots who cost us more and put our health more at risk in the name
of the environment -- without checking it out first -- and the only winners
of the game are corn and oil conglomerates? Seems like the ballot box is a
good place to start...
Meanwhile, MTBE should be put back in the scary grab bag from whence it
came, and corn should resume its natural role as a major food source.
Government should keep its soiled fingers out of gasoline, wash them, and
step up the work on alternative fuels like hydrogen fuel cells, which can
also produce electricity for our homes, business and industry.
Daniel B. Jeffs, founder
The Direct Democracy Center
******
Revealing information from Ethanol-promoting Websites:
BBI International energy consulting firm - BBIethanol.org
RFA Renewable Fuels Association - EthanolRFA.org
April 3, 2002
Ethanol Industry Urges Kinder Morgan to Allow Gasoline Blendstocks for
Ethanol Through California Pipeline System
WASHINGTON, DC - As reports continue to appear that several California oil
refiners prefer to switch from MTBE to ethanol by the end of this year, the
Renewable Fuels Association (RFA) urged Kinder Morgan, which operates
California's only common carrier pipeline system, to allow shipments of
gasoline blendstocks for ethanol. If Kinder Morgan decides to allow only
MTBE-blended gasoline through their pipelines, oil companies will feel
compelled to continue using MTBE, a water-polluting gasoline additive,
instead of switching to ethanol.
"According to several news reports, four of California's six major oil
companies prefer to switch from MTBE to ethanol this year," said Bob
Dinneen, RFA president. "Kinder Morgan has stated they could accommodate
both fuels and was recently quoted saying, 'They're [oil companies] our
customers. We'll do what they want.' We are writing to urge Kinder Morgan to
follow up on their public comments. The message is clear. The majority of
California oil companies want to use ethanol. Kinder Morgan should
accommodate their needs. By doing so, the opportunities for further MTBE
drinking water contamination can be reduced."
In a letter to Kinder Morgan Chairman Richard Kinder, Dinneen wrote:"In the
aftermath of California Governor Gray Davis' decision to delay the MTBE
phase out, several oil companies have expressed a preference to move forward
with their plans to eliminate the use of MTBE in the state as originally
scheduled. As the sole common carrier pipeline operating in California,
however, your company's decisions will to a large extent determine whether
those oil companies preferring to use ethanol will indeed be able to do so.
Consequently, I am writing to urge you to allow gasoline blendstocks for
ethanol to be shipped on the Kinder-Morgan pipeline, thereby providing
refiners and consumers in California access to MTBE-free gasoline.
"The domestic ethanol industry has demonstrated there are sufficient
supplies of ethanol to replace MTBE, refiners have testified to their
readiness to meet the original phase out deadline, and state water officials
are adamant that drinking water supplies be protected. More importantly,
consumers across California overwhelmingly believe MTBE should be removed
from gasoline.
"I understand the uncertainty created by the Governor's decision to delay
his March 1999 Executive Order has made investment decisions more difficult.
That uncertainty is complicated further by legislative activity in
Washington, D.C. that will affect oxygenate and renewable fuel use in
California and across the country. But under any circumstance, it is clear
the demand for ethanol will increase in California, and any investments
necessary to accommodate the use of ethanol today will certainly pay
dividends quickly.
"The petroleum industry and the ethanol industry are looking for workable
solutions to the MTBE issue in California, but no transition plan can be
effective if the only common carrier pipeline responsible for transporting
the majority of gasoline across the state restricts the opportunities to use
ethanol blended gasoline.
"Because of Kinder Morgan's unique and critical role in supplying gasoline
throughout California, it is our goal to work with you and the petroleum
industry to create the best opportunities for consumers in the state. I hope
that you will be willing to work with our member companies to accommodate
those refiners and gasoline marketers preferring to use ethanol blended
gasoline now, rather than when MTBE is banned by the State of California."
For more information, visit the Renewable Fuels Association website at:
www.ethanolRFA.org
******
LATEST NEWS
April 19, 2002
California Jury Verdict Highlights Hidden MTBE Gas Tax
MTBE Clean-up To Cost Consumers 22 Cents Per Gallon of Gasoline
WASHINGTON, DC - On Monday a jury in San Francisco held three oil companies
liable for the MTBE contamination of Lake Tahoe in California. Several other
companies had settled with the South Tahoe Public Utility District prior to
trial. The Tahoe district estimates that clean-up costs could amount to more
than $50 million.
"There is a rising gas tax on American consumers - the clean-up costs
related to MTBE," said Bob Dinneen, RFA president. "It doesn't matter
whether local governments or oil companies pay for clean-up efforts; the
ultimate cost is borne by consumers in the form of higher taxes or higher
prices at the pump. The longer MTBE remains a part of our gasoline supply,
the higher this tax will be. MTBE clean-up costs amount to the equivalent of
a hidden 22 cent per gallon gasoline tax. The current Senate energy bill
contains a bipartisan agreement that will ban MTBE nationwide in four years,
but efforts to destroy this agreement by reducing or eliminating the
renewable fuels standard (RFS) will do nothing more than extend the use of
MTBE and force higher pump prices onto the backs of consumers."
A study conducted for the city of Santa Monica, that is also suing oil
companies for MTBE contamination, found it will cost at least $29 billion to
clean-up MTBE nationwide - or 22 cents for every gallon of gasoline sold in
the U.S. last year. According to the U.S. Energy Information Administration,
131.6 billion gallons of gasoline were consumed in 2001.
"This jury has sent a clear message to refiners that they should stop using
MTBE as soon as possible," said Dinneen. "For example, in California, every
oil refiner has indicated they could switch from MTBE to ethanol by the end
of this year. Now that Governor Davis delayed the state's MTBE ban until
2004 there is uncertainty whether the refiners will move forward. However,
this verdict clearly highlights the liability risk of continued MTBE use.
The ethanol industry stands ready to supply any oil company wishing to end
their use of MTBE and reduce their exposure to future clean-up costs.
Switching to ethanol makes sense for consumers and it makes dollars and
cents for oil companies."
The Tahoe trial now moves to the penalty phase where the utility district is
seeking actual and punitive damages. Similar suits are moving forward in
numerous other states. Fourteen states have acted to ban MTBE as a result of
water contamination and other bans are pending.
******
Powerful opposing forces killed proposed Alaskan oil drilling and tighter fuel standards
By H. JOSEF HEBERT, Associated Press Writer
WASHINGTON - The Senate is moving to wrap up an energy bill, but without two
proposals that sparked the greatest political fireworks and may have had the
most impact.
Drilling in Alaska's Arctic National Wildlife Refuge (news - web sites),
which environmentalists made a symbol of their opposition to the Bush
administration's policies, and slapping automakers with tough new fuel
economy requirements were found to be politically too hot to accept.
In a showdown Thursday over the future of the refuge, drilling supporters
could muster only 46 of the 60 votes needed to end a Democratic filibuster
and allow a vote on putting the refuge provision into a broader energy bill..
The House already had approved drilling as part of its energy package and
President Bush (news - web sites) had made it a centerpiece of his energy
agenda..
"The Senate missed an opportunity to lead America to greater energy
independence," White House spokesman Ari Fleischer (news - web sites)
declared, echoing Alaska's two senators who described the refuge as a way to
reduce U.S. reliance on dictators such as Iraq's Saddam Hussein (news - web
sites) for its energy..
Still, eight Republicans abandoned Bush and joined with most Democrats in
rejecting drilling in ANWR, as the refuge is called. "There are other, more
feasible options for ... reducing national foreign oil dependence," said
Sen. Lincoln Chafee (news, bio, voting record), R-R.I..
"Development would irreversibly damage this natural resource," argued Sen.
Joe Lieberman (news - web sites), D-Conn., referring to the refuge's coastal
plain where thousands of caribou visit and give birth to their young each
summer, joined by millions of migratory birds, musk-oxen, polar bears and
other wildlife..
While drilling advocates argue the oil could be developed while still
protecting the wildlife, Sen. John Kerry (news, bio, voting record),
D-Mass., maintained that the oil - estimated as likely between 5.7 billion
and 11.6 billion barrels - still wasn't enough to make a serious dent in
imports when it would start flowing south in eight to 10 years..
What would help, Kerry argued, would be a significant increase in the fuel
efficiency of automobiles and sport utility vehicles, which guzzle 70
percent of the 19 million barrels of oil consumed each day in the United
States..
But like the Arctic drilling, the auto fuel economy became a lightning rod
in the energy debate. When Kerry pushed to boost federal fuel economy
requirements by 50 percent, the auto industry and autoworkers said jobs
would be lost and suburban soccer moms would no longer be able to buy SUVs.
The proposal was killed last month on a 63-38 vote..
Many of the same senators who opposed the fuel economy increase raised
alarms during the Arctic refuge debate over U.S. reliance on oil imports,
said Kerry. "They had no interest in national security when we put before
the Senate a plan that would have saved America 1 million barrels a day in
2015 and 2 million barrels a day by 2020.".
The Senate likely will finish its energy legislation, covering more than 580
pages, sometime next week. Both Senate Majority Leader Tom Daschle, D-S.D.,
and Republican leader Trent Lott of Mississippi want a bill, as does the
White House..
While lacking either oil drilling in ANWR or significant auto fuel economy
measures, the bill includes myriad items that are attractive to politically
powerful energy industries.
*******
April 5, 2002
Anti-MTBE campaign gets in gear.
Despite Gov. Gray Davis's decision to delay banning the polluting fuel
additive MTBE until 2004, environmental groups want to shame oil companies
into removing the chemical from California gasoline by next winter anyway..
In a letter to international oil giant BP, which owns the Arco retail
gasoline chain, 37 environmental and pro-ethanol groups said they are
considering a campaign "to inform Californians which companies are
supporting MTBE.".
Consumers then could choose to buy gasoline from companies that have
replaced MTBE with ethanol, a fuel additive made largely from corn..
Amid predictions that gas prices would soar up to $3 a gallon, Davis decided
last month to delay banning MTBE (methyl tertiary butyl ether) until the
start of 2004..
Nevertheless, two of the state's six large oil refiners -- ChevronTexaco and
Shell Oil -- say they are planning to eliminate MTBE at the end of the year
if Kinder Morgan Energy, the state's main owner of pipelines and tanker
truck terminals, can accommodate the change..
The refineries then would have to replace MTBE with ethanol in much of their
gasoline production. Ethanol, would be blended into gasoline at Kinder
Morgan's truck-filling stations and stations owned by the refiners
themselves..
Phillips Petroleum already has switched from MTBE to ethanol at its Rodeo
refinery, but is re-evaluating whether it can continue with the phaseout..
If BP, ChevronTexaco and Shell all commit to the switch, the other oil
companies would likely follow, said Brooke Coleman, director of the
Renewable Energy Action Project, a coalition of environmental and
pro-ethanol groups..
Coleman said he is targeting BP because the United Kingdom-based company
touts itself as an environmentally sensitive energy company..
When BP purchased Arco in 1999, the company told Davis that it would try to
remove MTBE -- a suspected carcinogen that has polluted water supplies --
from California gasoline one year early..
The company did not accomplish that goal..
"They're talking the talk about environmental protection and social
responsibility, but in California they're not walking the walk," Coleman
said. "This is an opportunity to show that they're serious about protecting
their own consumers.".
BP is the largest California user of MTBE, according to California Energy
Commission statistics..
Company spokesman Paul Langland said the company is continuing upgrades to
its Southern California refinery that will allow it to ultimately eliminate
MTBE..
"We support the governor's decision but we're looking at all of our
options," said Langland. "To bring disruptions to the California gasoline
market is not in anyone's best interest.".
Because oil refiners share Kinder Morgan's pipeline system and truck
terminals to transport their gasoline, "it's impractical for a single
company to act alone in this huge complex distribution system," said
ExxonMobil spokeswoman Jeanne Miller..
ExxonMobil did not take a position on delaying the MBTE ban, but said it
would continue to upgrade its refinery to eliminate MTBE..
After Davis announced the delay, Kinder Morgan decided to halt all
modifications to its terminals that fill up gasoline tanker trucks..
The company is not willing to spend money on the upgrades unless it is sure
that it gets a return on its investments, spokesman Rick Rainey said..
"We've seen no clear indication as to which direction they're headed,"
Rainey said. "As soon as they let us know what their plans are, we're more
than willing to respond.".
Steve Hall, executive director of the Association of California Water
Agencies, said the state should encourage Kinder Morgan and the refiners to
eliminate MTBE as soon as possible..
"We think that the best way to solve the logistical problems is to start
tackling them," he said..
Valero Energy, which supports the governor's decision, said it may move to
ethanol if the rest of California's refiners do so..
"There's just a whole lot of uncertainty in the industry now about what will
actually occur," said company spokeswoman Mary Rose Brown. "if everybody
moves to ethanol, we may have no choice than to move to ethanol early.".
Tesoro Petroleum, which will take over the Golden Eagle refinery near
Martinez at the end of April, declined to comment until the refinery
acquisition goes through..
Business Writer Alan Zibel can be reached at (925) 416-4805 or
azibel@angnewspapers.com.
********
April 10, 2002
Kinder Morgan Moving Ethanol Blendstock in California.
HOUSTON - Kinder Morgan Energy Partners, L.P. today clarified a number of
inaccuracies that have been reported in the media following a decision by
California Governor Gray Davis to delay a ban on MTBE gasoline until Dec.
31, 2003. "Unfortunately, KMP's role has been mischaracterized," said Mary
Morgan, vice president of marketing for KMP. "We are simply a service
provider, and our sole objective is to meet our customers' needs. We will
not be an impediment to the conversion from MTBE to ethanol.".
KMP owns a common carrier products pipeline in California that transports
gasoline, jet fuel and diesel fuel throughout much of the state. KMP has
published specifications for ethanol blendstock (CARBOB -- California
Reformulated Blendstock for Oxygenate Blending), which is the primary
component of ethanol-blended gasoline, and routinely accepts nominations for
and provides transportation of CARBOB. "We have been moving CARBOB on our
pipeline for over a year and have no plans to discontinue or change this
policy," Morgan said. "Any shipper that wants to move CARBOB on our pipeline
may do so right now.".
A secondary issue involves the availability of ethanol-blending facilities
at refineries and terminals. In many locations, the major refineries have
their own terminals and are capable of blending their own ethanol without
KMP's involvement. In fact, much of the gasoline delivered to the Los
Angeles and San Francisco areas is supplied to retail stations directly from
the refineries in those areas..
KMP owns 11 terminals in California, of which seven currently have limited
ethanol- blending capabilities. KMP's terminal facilities will be ready to
accommodate additional ethanol blending when the MTBE ban goes into effect,
or sooner, if a customer has a need and enters into a contract for those
services..
Kinder Morgan Energy Partners, L. P. is the nation's largest pipeline master
limited partnership with an enterprise value of approximately $9 billion.
KMP owns and operates more than 25,000 miles of pipelines and over 70
terminals. Its pipelines transport more than two million barrels per day of
gasoline and other petroleum products and up to 7.8 billion cubic feet per
day of natural gas. Its terminals handle over 55 million tons of coal and
other dry-bulk materials annually and have a liquids storage capacity of
approximately 55 million barrels for petroleum products and chemicals. KMP
is also the leading provider in the U.S. of CO2, which is used in enhanced
oil recovery projects..
The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI), one
of the largest midstream energy companies in America. Combined, the two
companies have an enterprise value of approximately $18 billion.
********
April 9, 2002
Ethanol debate is ready to boil over
BY TOM WEBB
Washington Correspondent.
WASHINGTON - Ethanol is a fuel that burns both ways..
In Minnesota corn country, nothing burns as brightly. A boom in ethanol
production has created rural jobs, boosted corn prices and rejuvenated
farming communities, luring farmers to invest in facilities that turn yellow
corn into golden profits..
"It's been a success story all the way around," said Richard Eichstadt,
manager of Pro-Corn, an ethanol plant near Preston. The plant opened in 1998
and is already expanding - to four times its original capacity..
But outside the Midwest, ethanol burns in a different way: It inflames..
Taxpayer groups howl about its government subsidies. Environmentalists say
ethanol causes as much harm as good. And critics mock its energy claims,
saying ethanol requires almost as much energy to make as it yields..
"If you have a government order forcing people to consume it, an industry
will develop," said Jerry Taylor of the Cato Institute, a Washington policy
group. "But it doesn't make it an efficient industry, or a good industry, or
economically wise.".
The ethanol debate has simmered for years, but this spring it may erupt..
Three big decisions are pending that will chart ethanol's national future..
So far, Midwestern ethanol boosters are winning on all three fronts:.
. The U.S. Senate this week will resume work on an energy bill that requires
tripling ethanol use nationwide, and would eventually ban an additive called
MTBE that competes with ethanol in clean-air programs.
.
. Congress this spring will try to pass a 10-year farm bill that could
include new incentives for growing corn, for building ethanol plants and for
using the fuel..
. In California, a fight is coming to a head on whether the state must use
ethanol to meet clean-air requirements. Democratic Gov. Gray Davis is
balking, fearing an ethanol shortage that could send gas prices soaring to
$3 a gallon..
Alluding to last year's crisis over man-made electricity there, Davis said,
"I am not going to allow Californians to be held hostage by another
out-of-state energy cartel.".
For Minnesota, which has never produced fossil fuels of its own, it's a
turnabout to be seen as an "out-of-state energy cartel." But it reveals how
the successes of the Midwest farm lobby is stirring up strong resentments on
both coasts..
For the past decade, Minnesota's ethanol growth has been fueled by state and
federal subsidies, goals of energy independence and a strong environmental
appeal..
But some environmentalists aren't convinced..
Under federal rules, cities that don't meet clean-air standards must use
oxygenated fuels, like ethanol, to reduce pollution. California used MTBE, a
chemical additive, but it polluted the groundwater. Ethanol fans say the
solution is obvious: Stop using MTBE and switch to ethanol for cleaner air
and water..
California officials dislike MTBE, but they don't see ethanol as the answer,
and they resent federal edicts forcing them to use it. Some
environmentalists are sympathetic, including Daniel Becker, director of the
Sierra Club's global warming program..
"If ethanol is produced in the right way and is used properly, it can help
reduce pollution," Becker said. "If it's produced in the wrong way and used
in the wrong seasons, it can increase pollution.".
Becker said ethanol does reduce some emissions, like carbon monoxide, which
helps in cold weather. But in warm weather, "it makes the entire (fuel)
mixture evaporate more readily than with just gasoline alone, and that
causes an enormous smog problem.".
In cold-weather Minnesota, by contrast, ethanol-blended gasoline is widely
credited with improving air quality. Twin Cities gas stations have been
required to sell only ethanol blends since 1995. The restriction went
statewide in 1997..
Today the state has 14 ethanol plants in the state, in towns such as
Preston, Little Falls and Buffalo Lake, nearly all new. Most of those 14
plants were bankrolled by groups of farmer-investors, with help from a state
subsidy..
"They were responding to a depressing situation in rural communities where,
gee, there weren't any jobs, kids were leaving town because there were no
jobs, and the price of corn was cheap," said Ralph Groschen with the
Minnesota Department of Agriculture. "In most cases, the towns and the
farmers and the local banks all chipped in to make it happen.".
Not only was the formula a success, but the building boom continues..
"Most of the (14) plants have expanded recently or are in the process of
expanding," Groschen said..
In Preston, Eichstadt said, "the impact it has had on the community here is
enormous": higher corn prices, 30 new jobs in the community south of
Rochester, new economic activity..
"There is some local pride associated with these plants, too," he said.
"They feel that they're doing somewhat their part (to help the country)
because they're producing an environmentally clean fuel, a renewable fuel.".
It's those hopeful stories, repeated around the corn belt, that prompt
farm-state Republicans and Democrats to push so hard on ethanol..
But as their fight goes national, outsiders will resist subsidies and
mandates designed mostly to produce good things in the Midwest..
Scoffed Taylor, the Cato analyst, "I'm sure robbing banks looked like a good
thing to Bonnie and Clyde, too."
********
April 9, 2002.
Impacts for Investors as Middle East Tensions Heighten Risks to Oil Supplies
Says S&P Industry Survey; Fallout from Standoff between OPEC and Russia Over
Oil Production also Mentioned
A Possible U.S. Attack Against Iraq Will Determine the Extent.
NEW YORK, April 4 /PRNewswire/ -- Standard & Poor's has released its
forecast for the Oil and Gas Production and Marketing Industry, which sees
Russia emerging as an alternative to Middle East oil supplies and poised to
regain its position as the world's top crude-oil producer for the first time
in a decade, as OPEC member nations comply with the cartel's quotas in 2002.
The leader in global financial research and investment analysis says that
short-term supply risks due to Middle East tensions and possible expansion
of the war on terrorism to Iraq are mitigated by the increased stores of oil
built up during the recent economic downturn. Beyond these issues, the
depletion of current reserves poses an ongoing long-term challenge for the
industry. For U.S. natural gas producers, the drop in actively-producing gas
rigs in 2001 stemming from a slow economy's reduced demand could mean a
return to the high gas prices of 2000, as demand outpaces the reduced supply
this year. The forecast is part of Standard & Poor's Industry Survey on Oil
and Gas: Production & Marketing, a study produced every six months by the
firm's senior equity analysts. Standard & Poor's Industry Surveys series
keeps a watchful eye on 51 U.S. industries, offering insights into trends
and conditions that affect leading companies' market performance..
"With the Middle East holding 66% of the world's oil reserves and supplying
over 35% of its current production, heightened tensions in the Middle East
could lead to a short-run supply of oil. Also, energy production and
distribution are vulnerable to the risk of terrorist attacks on the U.S. and
elsewhere," says Tina Vital, Standard & Poor's Oil and Gas analyst and
author of the survey. "But a serious problem looms in the long run as well:
the depletion of oil reserves. From 1980 to 1990, oil reserves rose by 54%;
however, from 1990 to 2000, oil reserves have increased by only 1.4%. So is
oil really running out?" she continues. Vital concludes: "The easy answer is
yes: Oil is a non-renewable resource and will someday become scarce. The
hard part is determining when.".
Industry Surveys for the Oil & Gas: Production & Marketing Industry looks at
the issues affecting all segments of the oil and gas production industry,
including: the National Energy Security bill before Congress which affects
the oil and gas industry on matters including automotive fuel economy
standards and a mandate to boost ethanol use; foreign trade restrictions,
notably regarding Iran and Libya; the growing prominence of newly-privatized
firms from emerging market economies; the impact of just-in-time refining;
and Europe's lead in the development of renewable energy projects. It also
looks at how certain of these issues and industry consolidations affect
companies such as BP, ChevronTexaco, ExxonMobil, Royal Dutch/Shell, and
TotalFinaElf.
********
ARCHIVED NEWS
April 12, 2002
DEFEAT OF FEINSTEIN ANTI-RFS AMENDMENT IS VICTORY FOR ENERGY SECURITY AND RENEWABLE FUELS
Senate Votes to Promote Renewable Fuels 61 to 36.
WASHINGTON, DC - Following action by the U.S. Senate today to protect the
renewable fuels standard (RFS) provisions of the energy bill, the Renewable
Fuels Association declared a victory for energy security, clean air,
consumers, and renewable fuels. By a bipartisan, filibuster-proof vote of 61
to 36, the Senate tabled, or defeated, an amendment by California Senator
Dianne Feinstein, which would have reduced the maximum time for the EPA to
respond to RFS waiver requests from 240 to 30 days. The RFS provisions are
backed by a historic coalition including members of the oil industry,
agricultural groups, environmental groups, public safety agencies, and the
ethanol industry. The amendment was offered during debate on S. 517, the
Senate energy bill..
Bob Dinneen, RFA president, made the following statement after the Senate
action:.
"Today's strong support for a meaningful renewable fuels standard reflects
the commitment of the American people to forge a new direction for meeting
our nation's energy needs. Energy security, affordable gasoline, and clean
air are not mutually exclusive. Today's strong endorsement of an RFS is a
step in the right direction for a brighter energy future..
"Given the broad, bipartisan support for enacting a meaningful RFS, today's
outcome was never really in doubt. The American people want more reliance on
clean, domestic fuels and less reliance on Saddam Hussein. They want MTBE
out of their gasoline and out of their drinking water. And they want
affordable gasoline while not sacrificing air quality. That's what the RFS
provisions embody and that's why the attempt to undue this historic
agreement was soundly defeated.".
For more information, visit the Renewable Fuels Association website at:
www.ethanolrfa.org.
********
ARCHIVED NEWS
April 10, 2002
Kinder Morgan Moving Ethanol Blendstock in California.
HOUSTON - Kinder Morgan Energy Partners, L.P. today clarified a number of
inaccuracies that have been reported in the media following a decision by
California Governor Gray Davis to delay a ban on MTBE gasoline until Dec.
31, 2003. "Unfortunately, KMP's role has been mischaracterized," said Mary
Morgan, vice president of marketing for KMP. "We are simply a service
provider, and our sole objective is to meet our customers' needs. We will
not be an impediment to the conversion from MTBE to ethanol.".
KMP owns a common carrier products pipeline in California that transports
gasoline, jet fuel and diesel fuel throughout much of the state. KMP has
published specifications for ethanol blendstock (CARBOB -- California
Reformulated Blendstock for Oxygenate Blending), which is the primary
component of ethanol-blended gasoline, and routinely accepts nominations for
and provides transportation of CARBOB. "We have been moving CARBOB on our
pipeline for over a year and have no plans to discontinue or change this
policy," Morgan said. "Any shipper that wants to move CARBOB on our pipeline
may do so right now.".
A secondary issue involves the availability of ethanol-blending facilities
at refineries and terminals. In many locations, the major refineries have
their own terminals and are capable of blending their own ethanol without
KMP's involvement. In fact, much of the gasoline delivered to the Los
Angeles and San Francisco areas is supplied to retail stations directly from
the refineries in those areas..
KMP owns 11 terminals in California, of which seven currently have limited
ethanol- blending capabilities. KMP's terminal facilities will be ready to
accommodate additional ethanol blending when the MTBE ban goes into effect,
or sooner, if a customer has a need and enters into a contract for those
services..
Kinder Morgan Energy Partners, L. P. is the nation's largest pipeline master
limited partnership with an enterprise value of approximately $9 billion.
KMP owns and operates more than 25,000 miles of pipelines and over 70
terminals. Its pipelines transport more than two million barrels per day of
gasoline and other petroleum products and up to 7.8 billion cubic feet per
day of natural gas. Its terminals handle over 55 million tons of coal and
other dry-bulk materials annually and have a liquids storage capacity of
approximately 55 million barrels for petroleum products and chemicals. KMP
is also the leading provider in the U.S. of CO2, which is used in enhanced
oil recovery projects..
The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI), one
of the largest midstream energy companies in America. Combined, the two
companies have an enterprise value of approximately $18 billion.
***********
ARCHIVED NEWS
April 3, 2002
Ethanol Industry Urges Kinder Morgan to Allow Gasoline Blendstocks for Ethanol Through California Pipeline System.
WASHINGTON, DC - As reports continue to appear that several California oil
refiners prefer to switch from MTBE to ethanol by the end of this year, the
Renewable Fuels Association (RFA) urged Kinder Morgan, which operates
California's only common carrier pipeline system, to allow shipments of
gasoline blendstocks for ethanol. If Kinder Morgan decides to allow only
MTBE-blended gasoline through their pipelines, oil companies will feel
compelled to continue using MTBE, a water-polluting gasoline additive,
instead of switching to ethanol..
"According to several news reports, four of California's six major oil
companies prefer to switch from MTBE to ethanol this year," said Bob
Dinneen, RFA president. "Kinder Morgan has stated they could accommodate
both fuels and was recently quoted saying, 'They're [oil companies] our
customers. We'll do what they want.' We are writing to urge Kinder Morgan to
follow up on their public comments. The message is clear. The majority of
California oil companies want to use ethanol. Kinder Morgan should
accommodate their needs. By doing so, the opportunities for further MTBE
drinking water contamination can be reduced.".
In a letter to Kinder Morgan Chairman Richard Kinder, Dinneen wrote:"In the
aftermath of California Governor Gray Davis' decision to delay the MTBE
phase out, several oil companies have expressed a preference to move forward
with their plans to eliminate the use of MTBE in the state as originally
scheduled. As the sole common carrier pipeline operating in California,
however, your company's decisions will to a large extent determine whether
those oil companies preferring to use ethanol will indeed be able to do so.
Consequently, I am writing to urge you to allow gasoline blendstocks for
ethanol to be shipped on the Kinder-Morgan pipeline, thereby providing
refiners and consumers in California access to MTBE-free gasoline..
"The domestic ethanol industry has demonstrated there are sufficient
supplies of ethanol to replace MTBE, refiners have testified to their
readiness to meet the original phase out deadline, and state water officials
are adamant that drinking water supplies be protected. More importantly,
consumers across California overwhelmingly believe MTBE should be removed
from gasoline..
"I understand the uncertainty created by the Governor's decision to delay
his March 1999 Executive Order has made investment decisions more difficult.
That uncertainty is complicated further by legislative activity in
Washington, D.C. that will affect oxygenate and renewable fuel use in
California and across the country. But under any circumstance, it is clear
the demand for ethanol will increase in California, and any investments
necessary to accommodate the use of ethanol today will certainly pay
dividends quickly..
"The petroleum industry and the ethanol industry are looking for workable
solutions to the MTBE issue in California, but no transition plan can be
effective if the only common carrier pipeline responsible for transporting
the majority of gasoline across the state restricts the opportunities to use
ethanol blended gasoline..
"Because of Kinder Morgan's unique and critical role in supplying gasoline
throughout California, it is our goal to work with you and the petroleum
industry to create the best opportunities for consumers in the state. I hope
that you will be willing to work with our member companies to accommodate
those refiners and gasoline marketers preferring to use ethanol blended
gasoline now, rather than when MTBE is banned by the State of California.".
For more information, visit the Renewable Fuels Association website at:
www.ethanolRFA.org
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