US petchems, refiners warn Congress on energy

20 July 2007 18:58  [Source: ICIS news]

By Joe Kamalick

 

WASHINGTON (ICIS news)--US petrochemical and refinery officials warned Congress on Friday that pending energy legislation could undermine US security and raise costs to consumers.

 

The National Petrochemical & Refiners Association said in a letter to House Speaker Nancy Pelosi (Democrat-California) that various energy-related measures now working their way through the House and Senate would inhibit domestic energy production and make the US even more dependent on foreign sources.

 

Among other energy-related measures, Congress is considering an increase to the US renewable fuel standard (RFS), an existing mandate that requires the US automotive fuels mix to contain 7.5bn gal/year of ethanol by 2012.  However, current US production of corn-based ethanol is already 6bn gal/year, and ethanol supporters want Congress to raise the goal to 12bn gal/year or more.

 

In his letter to Pelosi, NPRA executive vice president Charles Drevna argued that with US ethanol production already closing in on the 7.5bn gal/year target set for 2012, further congressional ethanol mandates would be both unnecessary and perhaps harmful.

 

“As a result of the RFS, commodity prices are higher, feeds for traditional agricultural uses are threatened, and performance and mileage questions have again been raised,” Drevna said.

 

He also criticized a bill that would impose an additional $16bn (€11.5bn) in taxes on US refiners; that tax revenue would be funnelled into renewable fuels research and development (R&D).

 

“While the tax package seeks to stimulate development of conservation and renewable energy, it does so by harming the international competitiveness of the refining sector,” Drevna said.

 

In addition, Drevna cautioned that a measure to increase fees and permitting requirements on oil and gas exploration and development would impede domestic energy production.

 

These measures, he said, will “undermine the access of refiners, chemical producers and others to vital sources of domestic oil and gas production”.

 

Congress is expected to vote on a new energy package within the next two weeks.

 

($1 = €0.72)

By: Joe Kamalick
+1 713 525 2653

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