The New York Times reports that oil companies are using the political push to increase ethanol production as an excuse not to increase their refinery production
The nation’s fuel supplies are so low that we have broken gas price records. The federal government is even recalculating inflation-adjusted gas prices to, depending upon how you look at it, undo high gas price records recently set or maintain records set in the era of gas lines that were in danger of being undone (American Public Media’s Marketplace has that story.) But refiners are reneging on a Congressional promise to make more gasoline.
Here’s what the NY Times reports, which also helps explains some of President Bush’s recent interest in alternative fuels:
In his State of the Union address in January, President Bush called for a sharp increase in the use of biofuels, along with some improvement in automobile fuel efficiency to reduce America’s use of gasoline by 20 percent within 10 years. Congress is considering legislation calling for a nearly fivefold increase in the use of ethanol.
That has forced many oil companies to reconsider or scale back their plans for constructing new refinery capacity.
In hearings before Congress last year, oil executives outlined plans to increase fuel production by expanding existing refineries. Those plans would add capacity of 1.6 million to 1.8 million barrels a day over the next five years, for an increase of 10 percent, according to the National Petrochemical and Refiners Association.
But those plans have since been scaled back to more than one million barrels a day, according to the Energy Information Administration, an arm of the federal government.
Congress should not allow oil companies to get away with backing out of their refinery production increase targets. This is the danger in a nation where the government has no real power to force an increase in gasoline production. And it’s exactly why we need new laws.