Original Autoblogger Reverend David Thomas over at Cars.com has been combing through HR 6899 (warning: 290 page pdf), a Democratic-sponsored energy bill passed last night by the House of Representatives. Included in the text: provisions for limited offshore and Alaskan drilling and oil shale field exploitation exploration. A provision starting on page 177 requires that gas stations owned by Big Oil companies each have at least one alternative fuel pump by 2018. There’s a carrot ($50k tax-credit) and stick ($100k penalty) for each station. Alt-fuels are defined as E85 (or even more ethanol), compressed natural gas (CNG), diesel (of at least 20 percent bio or other renewable source) and hydrogen. So, where to begin with this lobbyist and re-election friendly clause? We’ve already stated the reluctance of independent chains to fork out the $50k cost of installing E85 pumps. CNG and hydrogen face huge chicken-and-egg problems: you want to buy or lease a new vehicle right now? (How much above MSRP?) Honda will produce just 1500 CNG-inhaling Civic GX’s for MY2009, and forget about getting a Clarity FCX unless you already own won a pair of Golden Globes. Anyhow, ExxonMobil is planning to get out of the gas station business because it’s not profitable enough. If the bill becomes law, don’t be surprised if the other majors follow suit to avoid having to fork out millions. Big if: the bill has yet to be voted on by the Senate. President Bush has promised a veto in the bill’s current form, and it passed the House by a less than a 60 percent (veto-proof) majority.
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This could encourage more of the majors to get out of the retail business. In most cases fuel stations are lucky to break even on fuel sales and get all their margin on the attached C-store.
From a cost standpoint adding CNG for urban locations or a 500-800 gal. above ground storage tank for B20-B100 would likely be the least painful.
Of course if we start using CNG as a motor fuel its going to jack electricity prices up, particularly in places like CA that get lots of the juice from natural gas.
Or just pass the cost to the customers.
This is a solid idea. I’ve used allot of B20 and can tell you its better than regular diesel in every way (as long as its made from SVO and not waste-fat). E85 may be a “boondoggle” but it puts money in the hands of the right people (farmers) instead of the wrong people (dictators, terrorists, oligarchs), and if you think its endangering our food supply, check your waist line, the proof is in the pudding – so to speak. Hydrogen is not a fuel, its just a damn expensive way to make electricity. CNG is good for fleet vehicles that make short trips. Bottom line if you give people more fuel choices some may catch on, and spreading our energy dollar around can only help us in the long run.
RedStapler :
This could encourage more of the majors to get out of the retail business. In most cases fuel stations are lucky to break even on fuel sales and get all their margin on the attached C-store.
I wonder how many stations will be required to change rusting steel gasoline/diesel storage tanks for “leak proof” tanks should they wind up mandated to install a new boondoggleE85 tank.
Several gas stations in the Austin area simply closed down, and I would guess liability/leaking steel storage tanks were the reason for the closure. Many of the pad sites still have the empty station sitting on them, and you know the actual property owners are in no hurry to remove the tanks. “Hey! I didn’t put them in the ground!”
Bruce
The bill is a “straw man” that surely won’t survive the first match. It’s designed to fail, but to make Congress look like its doing something.
As I recall, there was a federal mandate to install lined underground tanks by the end of 2000, and a number of small stations simply closed rather than replace their old tanks. One wonders how the liner in those new tanks would fare against ethanol.
I’m sorta with joe_thousandaire on this. While it’s not an “omygosh this is aweseome” kind of bill, I think our representatives in Congress could’ve done a lot worse. And perhaps, they will yet.
The one that makes the most sense is B20. It’s better for the engines than straight low-sulfur dino diesel, and on this kind of scale, it would let us use a lot less of that “free trade” oil. You know, the stuff that’s constantly on a roller coaster ride lately because of the Chinese Indians European diesel laws speculators in global energy markets hurricanes.
I don’t see the other things doing us much good. E85 is a losing proposition (still), and the CNG and Hydrogen fuels are sort of non-starters because they’re a ways out there for regular schleps like us.
It is in the long run just another tax on the consumer. The companies need to pay for this and will via tax subsidies(no the government doesn’t have majic money) and then raise the price to the consumer. Like there is no free lunch.
So we’ll see higher fuel taxes to make this happen?
Oh well.
If you couldn’t predict higher fuel taxes after witnessing that no, Virginia, the economy didn’t collapse with $2, $3, $4, or even in some places $5 gas and diesel, then you’re pretty short-sighted. With infrastructure crumbling (I-35W bridge just reopened, a year later), freight haulers asking for relaxed weight restrictions (more weight= more wear and tear on roads and bridges), and a reeling Highway Trust Fund, it should come as little surprise that– with this bill or without it– gas taxes will probably go up to more realistically reflect the demand for infrastructure upkeep in this paved nation of ours.
It’s sort of like going to war and then announcing a big tax cut. Doesn’t make sense, and puts you in the red. So why continue to have some of the lowest fuel taxes of all modern industrialized nations while struggling to pay for the upkeep (let alone new construction of) roads?
Just like you said, there is no free lunch. I’d rather my increased fuel taxes be used to help something like decreasing our use of “free market” oil, as the B20 provision would easily and relatively painlessly help us do, than to see my increased fuel taxes go to a Highway Trust Fund “lock box” (remember that term from Social Security?) and watch it get siphoned away on useless Bridges to Nowhere.
But you mark my words, one way or another, once the government has seen our ability to pay for high-cost fuel, we will see higher fuel taxes if and when prices return to sanity– which is coming sooner than later, with oil on a quick descent as speculators and hedge fundies finally get their grubby paws out of commodities markets.