Tuesday, May 29, 2007

Big Oil Uses "Ethanol Excuse"


The American Coalition for Ethanol (ACE) has responded to recent comments by oil company executives who are attempting to blame current record high gasoline prices on the petroleum sector's concern over future ethanol growth.

"Big Oil's latest attack on ethanol is stunning, even for them," said Ron Lamberty, ACE Vice President / Market Development. "I don't think 'audacity' is an audacious enough word to describe this latest attempt to blame ethanol for Big Oil's failure to meet our energy needs."

In markets that carry ethanol-blended gasoline, ethanol blends are currently selling for as much as 10 cents per gallon less than even the lowest octane straight gasoline. All vehicles can use gasoline with 10% ethanol or less, and ethanol-enriched gas is sold in nearly half of the stations in the United States.

"Right now, ethanol may be the only reason prices haven't gone even higher," Lamberty said. "The ethanol industry continues to grow while oil refiners continue to make excuses for maintaining their profitable status quo."

In a May 24 New York Times article, executives from Shell Oil Company and Chevron are on the record saying that the nation's push for alternative fuels is placing "great risk" on decisions to expand oil production and refining capacity.

Prior to these comments, the oil industry has expressed a very different opinion of the size and scope of the ethanol industry - voicing concerns that ethanol production will never be big enough to meet the oil industry's demand. An industry spokesman even called E85 "a joke" earlier in the week.

"Last spring when oil companies shorted supply by eliminating MTBE, gas prices went up and oil companies complained that there wasn't enough ethanol," Lamberty said. "Now they're saying that they're afraid to expand because ethanol is getting too big? Which one is it?"

In hearings before Congress last year, oil company heads told of plans to increase fuel production by expanding refinery capacity by up to 1.8 million barrels per day - an increase of 10 percent over 5 years. The Times article states that, according to the DOE's Energy Information Administration, these plans have been scaled back by 60 to 80 percent.

"Big Oil has justified huge profits by explaining that they're reinvesting most of that money into increased exploration and production, but today they're saying they didn't actually do that and they don't plan to in the future. Isn't that the real story here?" Lamberty said.

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1 comment:

Redneck Christmas Elf said...

It was only a matter of time before the 2 industries began pointing the finger at each other.. Both Gasoline producers and Ethanol Producers providing information suggesting the other is to blame.
http://ethanolhoax.wordpress.com/2007/06/16/corn-may-not-be-the-cause-of-higher-food-prices/