Wells coming off the confidential list have been posted; see sidebar at the right.
RNB Energy: RINS and the EPA Ethanol mandate; USSR-style-central-planning promulgated by President Obama
To understand what is going on with RINS you first need to know about the ethanol mandates. The Energy Policy Act of 2005 and the 2007 Energy Independence and Security Act (EISA) mandated increased use of renewable fuel in place of gasoline.
The Environmental Protection Agency (EPA) implements the mandates. By renewable fuel, the legislation principally refers to ethanol produced from corn but also covers biodiesel, cellulose biofuel (ethanol produced using crops other than corn), and advanced biofuel. Although the biofuel mandates are not without controversy the current market excitement is all about ethanol – by far the largest source of renewable fuel. Most US ethanol is produced from corn. The stated benefits of blending ethanol into gasoline are twofold. First ethanol is an oxygenate that reduces the carbon monoxide emissions that come from burning gasoline and second ethanol is renewable and in theory reduces our dependence on finite fossil fuels.Oil and Gas Journal is reporting -- it's going to come much sooner than expected: US oil production is going to surpass US oil imports by the end of the year. And had the Keystone XL been approved by the president in 2011, his first opportunity, the North American continent would now be producing far more oil than what we are importing from OPEC. But I digress. Back to the linked story:
US monthly crude oil production is expected to exceed the amount of crude oil imports later in 2013 for the first time since February 1995, the Energy Information Administration projected. The projected change is primarily attributed to rising US crude oil production, particularly from shale and other tight rock formations in North Dakota and Texas.Note again the reference to the Bakken. Amazing, isn't it?
This is really quite remarkable. The other day I polled readers about funding the president's proposed Energy Security Trust with oil royalties from off-shore drilling (federal leases). I guessed there would not be enough money from off-shore drilling to pay for this Solyndra-slush fund. So, tongue-in-cheek I asked whether folks receiving Bakken royalties would be willing to help fund the president's new slush fund. (Surprisingly, 7% said they would agree to send some of their Bakken royalty money to Washington, DC. I assume they were spoofing or misunderstood the question.) [At the link, the results of the poll are at the bottom of the post.]
Be that as it may, it was all done tongue-in-cheek. Well, the truth is stranger than fiction. The Oil and Gas Journal is now reporting (just days after my poll) that there will not be enough money in off-shore oil to pay for the Energy Security Trust fund.
The Obama administration will need to open more onshore and offshore federal acreage to oil and gas development if it expects a proposed energy security research trust fund to work.I hope the president doesn't find out that 7% of MillionDollarWay Bakken mineral right respondents would be willing to help fund the slush fund as determined by a recent MDW poll.