Green energy--Cooking the books with cooking oil credits

Loren Steffy:

It's a big fat lie - or perhaps I should say it's a big lie about fat.

Since 2007, federal regulators have attempted to foster and oversee a "market" for biodiesel, the renewable fuel, mostly for heavy trucks, that's made from animal fats, cooking oil and the like.

The program is part of the renewable fuels mandate enacted by the Bush administration and continued under President Barack Obama in hopes of encouraging enough production to create a viable market. It's a worthy goal, but this isn't the way to do it.

As the Chronicle's Zain Shauk explained recently, the program calls for refiners to buy or produce enough biodiesel or other fuels to offset 9 percent of their fossil fuel production. Companies that can't meet that quota can buy credits from others that do.

But the market for buying and selling those credits is rife with allegations of fraud, which has undermined confidence of the refining industry and sparked lawsuits.

The Environmental Protection Agency, which oversees the market, has found more than 140 million fraudulent credits out of the 1.6 billion generated last year. In other words, the government attempted to create a market out of thin air and use it as an incentive to develop a fuel source that lacks the economic viability to create demand on its own.

Having created this so-called market, the EPA has done little to police it, and when it has acted, the enforcement came after the fact. The EPA doesn't review the credits to ensure they're authentic, and it even goes so far as to disclaim any responsibility for ensuring they're legitimate. It's up to the buyer to determine if credits may be fake.

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So how is the company that is forced to buy the credit supposed to be able to determine if it is valid? Who knows.  This is an example of how the anti energy left attempts to manipulate the market for real fuel by creating credits for none existent fuel.  We should do away with the requirement.  If the bio diesel has any value, there is no need for a law requiring people to buy it.