Shifting biofuel rules confound US logistics industry - exec

08 June 2009 23:04  [Source: ICIS news]

HOUSTON (ICIS news)--Shifting US regulations for biofuels are making it more difficult for the nation's logistics industry to plan future investments, an energy executive said on Monday.

"It's very difficult to make future investments when you aren't sure what the rules are going to be," said Jim Lelio, director of business development for Kinder Morgan Energy Partners, at the International Liquid Terminals Association (ILTA) annual meeting in Houston.

"You have federal requirements coming out and states putting different requirements on the process of creating biofuels and the feedstocks used, and more questions are being raised, he added.

Lelio cited the application of the federal Renewable Fuels Standards (RFS), which are on the Congressional agenda this summer, as a potential problem because the development of the policy is sometimes ahead of the development of the product.

"There are mandates for products out there that aren't even possible today," he said. "It's very difficult to make an investment and be proactive and say we'll be aware when we don't even know what the product will look like.

"In the end, you end up with products that are very rushed, and the preparation time is very short," he added.

Lelio said the changes in environmental standards from state to state also posed problems. California and New Jersey are particularly stringent, he said, compared with other states along the typical pipeline routes.

"Our customers need clarity," he said. "They have to sign long-term contracts."

The ILTA conference runs through Tuesday.

Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels
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By: Ben DuBose
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