BUSH’S BODMAN BACKS MANDATES FOR NEW ENERGY

Make no mistake: NewEnergyNews is keenly aware that Bodman's shilling for ethanol and E-85 is misguided. But even Bodman knows that. On the subject of alternative fuels, he was quick to hedge his bet: "There is no one silver bullet here…We have to pursue a broad range of tactics."

But more significantly, by acknowledging the value of legislative mandates for renewable vehicle fuels, Bodman took away a big argument traditionally used by Republicans in general and the Bush administration in particular against the national Renewable Electricity Standard (RES). The RES is a mandate in the currently pending Congressional energy bill that requires US utilities to obtain 15% of their electricity from renewable sources by 2020. Bodman admitted that sometimes a mandate is necessary: "Sure, I'd like to get things done without mandates…[But they have proven to be a requirement in order to get a lot of these things done more effectively…"

Is anybody going to take this to the fight over the national RES?

Federal Energy Secretary Says Mandates May Be Needed
Blake Nicholson, October 29, 2007 (AP via Yahoo Finance)

WHO
Energy Secretary Samuel Bodman, Sen. Byron Dorgan, D-N.D., Sen. Richard Lugar, R-Ind., Mike Rud, president, North Dakota Petroleum Marketers Association

Some choices are definitely better than others. And 2 of the best choices, plug-in hybrids and biocrude from algae, are off the chart good. (click to enlarge)

WHAT
- In what may represent a huge break with the Bush administration’s previous position, Bodman acknowledged that legislative mandates may be necessary to spur growth in New Energy.
- At the same energy conference, Dorgan announced legislation co-sponsored by Lugar mandating refineries to produce 36 billion gallons of biofuels/year by 2022 and automakers to manufacture 80% flex-fuel vehicles by 2015.

WHEN
The Dorgan-Lugar legislation supports President Bush’s call for the US to cut petroleum-derived fuels 20% by 2017.

WHERE
The energy conference was in Bismarck, North Dakota.

WHY
- It is hard to create momentum big enough to achieve the goals President Bush and other leaders call for without a legislative mandate guaranteeing businesses there will be a market for what they produce if they make the investments in new capacity. This principle applies to fuels as well as electricity. Both require large capital outlays for the building of infrastructure before producers can obtain returns. Mandates guarantee minimum markets and promises of returns.
- Presently, the US has 6 million vehicles flex-fuel vehicles but only 2% of the nation’s gas stations sell E-85. Building more E-85 pumps would increase sales but it will cost a lot for stations to do so. The Dorgan-Lugar legislation would incentivize the creation of that infrastructure as well as pipelines and storage facilities to handle E-85.
- E-85 pumps cost gas stations $80,000 - $150,000 and E-85 gives less miles/gallon.

Here the President and Secretary Bodman examine a plug-in hybrid. Did Bodman, in doing the President's bidding on ethanol, undercut the administration's argument against a national Renewable Electricity Standard (RES)? (click to enlarge)

QUOTES
- Bodman: "Sure, I'd like to get things done without mandates…[But they have proven to be a requirement in order to get a lot of these things done more effectively…"
- Rud: "Rather than a tax credit, (gas stations) would love to see some upfront money…Tax credits are of really no value to many of our marketers in North Dakota. We're not making money at the pumps. What would better suit our industry ... is something to help offset the (installation) cost…Right now, consumer demand is not there for the product…"