Monday, February 27, 2012

Picking winners and losers in the Energy business

The EPA, for whatever reason but I assume it is due to their ever growing need for control, classifies Nat Gas being used as a transportation fuel differently than it does gasoline and diesel being used as a transportation fuel. They require every engine plant to be inspected by them before the engine can be approved for use in vehicles. This takes approximately 6 months per engine submitted and costs approximately 250K. So, if I am a vehicle manufacturer with 4 different engines, I have to submit one of each, pay a million dollars and wait six months to see if they will be approved for use. Next comes the emissions module, it must be modified and approved as well, because it is a federal crime to modify the emissions module in vehicles without EPA approval.

So, now, next year comes along and the engineers change the angle of the plenum chamber or modify the fuel injectors to better disperse the Nat Gas molecules, the engine becomes more efficient, but the change forces the manufacturer to go through the approval process again.

Bottom line, this is not necessary with oil base fueled engines and shouldn't be necessary with Nat Gas based engines. This is just another example of the FED choosing the winners and losers in their game of social engineering. The EPA should do nothing more than develop emissions output standards and leave it up to industry to develop the fuels and protocols which meet their standards. As far as I'm concerned, the EPA shouldn't even be allowed to force fuel economy standards on the auto industry. The consumer should have the right to choose what type of vehicle they want to drive and how much fuel the vehicle consumes, provided the exhaust emissions fall below set standards.

Let the EPA set the tail pipe emissions standards for the different classes of vehicle powerplants and let industry develop and sell the products which meet those standards. There should not be different standards for different classes of fuel because this is extremely discriminatory and inhibits innovation. And stop the bullshit subsidization of various classes of fuel. Ethanol is NOT a competitive fuel and shouldn't be subsidized. Neither should there be depletion allowances for the oil and gas companies. They know that the fuel they recover is available in finite amounts and that is calculated into the cost of doing business. It should not be subsidized by the government any more than the Solar, wind or Algae to biofuel industry should be subsidized by the FED.