Tuesday, January 10, 2006

Starting the year off right...

So of course, the illustrious congress, led by ecofreaks, makes 2 new laws to raise the price of gas and diesel fuel.

2005 was a very expensive year for gasoline. And thanks to Washington, 2006 could be even worse.

The feds did not waste any time, with two costly gasoline requirements having taken effect on January 1st. That’s right. The year has already begun with two new regulations that will raise the price at the pump.

The first is the new ethanol mandate -- part of the massive energy bill passed last August. Under the new law, 4 billion gallons of this corn-derived fuel additive will have to be included in the nation’s gasoline supply throughout 2006.

Ethanol costs more than gasoline (if it didn’t, its producers would not need federal help) -- and its use reduces fuel economy. The new mandate is great news for some well-connected special interests, namely Midwestern corn farmers and big ethanol producers like Archer Daniels Midland (ADM). But those who are stuck paying the tab -- you -- will be far less thrilled.

Please make special note of this. Ethanol if sold per gallon, is the same price as a bottle of top shelf Vodka. The true cost of ethanol is about $20 per gallon once everything is factored in. There is no evidence that it burns any cleaner than gasoline, and in many people realize the uselessness of ethanol. But the fun doesnt stop here...

Over the past ten years, the EPA has imposed a bewildering variety of fuel requirements, with as many as 18 so-called boutique fuels in use at any given time. The cost and complexity of this scheme goes well beyond any rational clean air justification. Granted, air quality has been improving, but it was doing so just as quickly before these newfangled fuel requirements were imposed.

The new ethanol and sulfur rules may each add several cents to the price per gallon -- bad enough, but it’s the cumulative burden of all these federal regulations that is even more substantial.

The fuel regulations will continue to grow after 2006. For example, EPA is required, pursuant to a settlement of a lawsuit brought by an environmental group, to propose another round of regulations limiting the amount of benzene and similar trace components from gasoline. The regulation must be proposed by February 2006 and take effect by 2007.

So here we are, faced with the facts and blindly ignoring in the name of the environment....Let's start with jailing the ecofreaks.

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