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April 2, 2010

Forum: LCFS targets U.S. economy

BY RANDY GROSS

Most folks may not know how critical our Canadian neighbors are in fueling the Michigan economy. Indeed, more than 63 percent of our state's gasoline and diesel fuel begins its life as unrefined oil in Canada.

Unfortunately, efforts under way in the capital right now threaten that critical relationship -- and the millions of people on this side of the border whose jobs and livelihoods depend on continued access to this secure, affordable and reliable energy.

A policy initiative known as the Low-Carbon Fuel Standard, recently imposed on California, seeks to reduce the carbon intensity of our fuels by cleaning up our environment, its proponents say.

However, the carbon content of fuel, according to the Environmental Protection Agency, is constant. For every gallon of gasoline combusted in our vehicles, a chemically consistent 19.4 pounds of carbon dioxide are emitted. Despite their best intentions, supporters of an LCFS cannot change the laws of fuel science. This begs a very simple question: What, exactly, is an LCFS really about?

If you took LCFS proponents at their word, it seems some of them believe the policy could be used to benefit Michigan's agricultural sector by forcing refiners to blend additional ethanol and biomass supplies into the fuel stocks we purchase a couple times a month at the gas station.

The problem with that analogy is that ethanol is deemed to be even more carbon intensive than gasoline. So the policy unfairly would discriminate against Canadian energy and apply the same indefensible biases when scoring energy resources produced right here in the state.

With Michigan's cold winters and energy-intensive industrial sector, Michigan residents clearly do not need energy policies that will increase energy costs and further hurt our manufacturing and industrial sectors.

For example, in Detroit the Marathon refinery produces almost 100,000 barrels of a day of gasoline and diesel fuel derived from Canadian energy -- energy that provides thousands of good-paying jobs to Michigan families, as well as pensions and health care.

In this troubled economy, why would any lawmaker in Michigan even consider putting those jobs on the line?

Last year researchers from California and North Carolina found that an LCFS actually might lead to an increase in the emissions, not a decrease. Furthermore, under the LCFS, our competitors in China would claim more of the resources from Canada previously destined for us.

Our leaders in both Lansing and Washington, D.C., need to say "no" to an LCFS. The people of Michigan cannot afford to adopt a policy that will lead to higher prices at the pump, fewer American and Michigan jobs and threatened energy security. We need legislation that will improve Michigan's competitiveness, nationwide and worldwide. And any and all new regulations must meet a rigorous cost-benefit analysis. Raising energy prices is not a solution we should tolerate now or any time in the future.

About the author: Randy Gross is director of environmental and regulatory affairs for the Michigan Manufacturers Association.

About the forum: The forum is a periodic column of opinion written by Record-Eagle readers in their areas of interest or expertise. Submissions of 500 words or less may be made by e-mailing letters@record-eagle.com. Please include biographical information and a photo.

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