Oil Stakeholders Rally against Low-Carbon Fuel Standard

by | Sep 3, 2009

oilrigA 125-member group, comprised of oil companies, retailers, trucking and transportation groups, and industry organizations, are stepping up efforts against a low-carbon fuel standard (LCFS), reports The Trucker. Some are also protesting the Obama administration’s multi-million grants to industry groups to promote clean alternatives to petroleum.

A LCFS will raise gas prices, cost jobs and force more energy dependence on foreign oil, according to the Consumer Energy Alliance (CEA), reports The Trucker. Although low carbon provisions were removed from the Waxman-Markey bill earlier this summer, CEA is starting a grassroots educational campaign against a LCFS because it may be considered again in future legislation, reports The Trucker.

The CEA raises concerns that oil imported from Canada will face stiff penalties under a low-carbon provision because it’s largely produced from sands with a higher carbon footprint, forcing the U.S. to buy costlier fuel from less friendly countries, according to The Trucker.

Among members of the group are the American Trucking Association, the American Bus Association, the American Highway Users Alliance, ConocoPhillips, Exxon, BP, Peabody, the National Association of Manufacturers and the U.S. Chamber of Commerce.

Petroleum suppliers estimate that climate change legislation could increase the cost of gasoline by 77 cents per gallon and 88 cents per gallon for diesel fuel, reports the American Trucking Association (ATA). The association said a one-cent increase in the average price of diesel costs the trucking industry an additional $390 million in fuel expenses, which would be passed on to shippers of goods and materials and then to consumers.

In addition, stakeholders in the oil industry are protesting the Obama administration’s multi-million grants to help trade groups promote clean energy including ethanol, natural gas, propane and biodiesel products, reports the New York Times.

Daniel Kish, a spokesman for the Institute for Energy Research, a conservative group fighting the proposed emissions caps, told the New York Times that the Department of Energy is basically underwriting these for-profit companies’ public-relations campaigns.

The Department of Energy grants, totaling $300 million, were awarded to 25 projects to encourage the use of cleaner and energy-efficient alternatives to petroleum. Most of the grants are targeted at alternative fuel and energy efficient vehicles and building the infrastructure for refueling stations. The grants are expected to help reduce the annual use of petroleum by 38 million gallons.

The Department of Energy also awarded about $3.25 million aimed at “educational projects” to increase “awareness of alternative fuels and advanced technology vehicles,” according to the New York Times.

Industry groups that received the grants like the Renewable Fuels Association told the New York Times that the grants would only go to marketing not for lobbying, and the groups were required to report their marketing to the Energy Department to ensure that accurate information is being disseminated to the public.

Stay Informed

Get E+E Leader Articles delivered via Newsletter right to your inbox!

Share This