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Tallahassee Democrat: David Mica: Mandates will distort our energy markets

Wednesday, May 15, 2013

By David Mica

Re: “Don’t let Big Oil keep us from renewable energy” (My View, May 3).

I am compelled to point out fallacious statements presented by Bradley Krohn in his renewable energy My View.

First, the oil and natural gas industry did not approach either of the sponsors about HB 4001/SB 320, repeal of Florida’s mandated 10-percent ethanol blended gasoline, nor did we lobby on behalf of the bills’ passages. According to testimony presented during committee meetings and espoused on the Senate floor, the bills originated from constituents who are discontented with the mandated fuel because of fuel mileage and small-engine performance.

Contrary to Krohn’s assertions, the oil industry does not support mandates for 100-percent market share — nor any mandates for that matter. Further, the industry has invested millions of dollars over the past decade in fundamental research and enterprises ranging from advanced biofuels to solar energy. An all-of-the-above strategy is necessary moving forward, and, with the right policies, this research and development can lead to North American energy independence by 2020.

Oil and gas will remain critical in that drive toward energy independence, and technological advances in hydraulic fracturing have led to recent reductions in dependence on foreign oil as well as price reductions for the natural gas used to generate electricity. The states pursuing hydraulic fracturing (North Dakota, Pennsylvania, Texas and others) have experienced tremendous growth in employment and state revenues. Brazil’s president also got it right when he announced Brazil’s energy independence from an offshore oil platform.

Mandates distort markets and create hidden costs that consumers must bear. For example, the federal renewable fuel standard mandated that gasoline marketers blend more than 750 million gallons of cellulosic ethanol over the past two years. When the oil industry informed the U.S. EPA there was no commercially available cellulosic ethanol to blend, the EPA responded by imposing fines on the oil industry. The cellulosic mandate increases to 1 billion gallons this year with still no commercially available cellulosic ethanol on the market.

Promoting mandates for self-beneficial purposes (as stated in Krohn’s My View) and disparaging an industry that supports 9.2 million jobs while supplying the energy that drives our economy is not good public policy.

While we did not participate in the passage of these bills, we are hopeful the governor, if he signs the legislation, will recommend that the federal government follow Florida’s example and repeal the federal mandate. The free market remains the most efficient arbiter for development of the all-of-the-above strategy.

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