The Most Transparent Administration EVER strikes again

In the last 5+ years we’ve heard some outlandish knee-slappers from the current Administration: “Smart Power“, “I do think at a certain point, you’ve made enough money“, and one of my personal favorites: “The System Worked…”.

But perhaps no quote was as patently ridiculous as this one: “Transparency and the rule of law will be the touchstones of this presidency…”

I could spend all week on “…the Rule Of Law...” aspect of that, so for today let’s just concentrate on the first part: transparency. This crew has been the antithesis of ‘Transparent’ in virtually everything, and we can now add one more example into the pantheon of their deliberately opaque practices.

Read on…

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Our story begins with an issue which has plagued our country for far too long. As with most of our super-serious problems, it is remarkably non-partisan: Ethanol.

If you aren’t up on your Ethanol history, it came into popular usage in the United States back in the 70s and 80s. Ethanol was added to gasoline to simultaneously boost octane and to control carbon monoxide emissions. But in 2007 everything changed, when the smarty-pants in Washington ordered a specific (and rising) amount of Ethanol be used in perpetuity:

(From CNBC.com) – Since Congress legislated mandated renewable fuel standards in 2007, oil refiners have chafed at the requirement that all gasoline contain 10 percent ethanol. Under current guidelines, refiners must blend increasing amounts of corn ethanol—16.55 billion gallons this year—with overall gas production, currently estimated at 133 billion gallons.

Yet based on current trends of declining gasoline use, the gas-to-ethanol mix will eventually have to exceed the 90-to-10 threshold, creating the “blend wall” refiners say could hike production costs and put upward pressure on gas prices.

Please note that the requirement of Ethanol to be blended is a static number, NOT a percentage of actual gasoline used. That is critical. Because as gas prices have remained high (depressing miles driven) and cars have become more fuel efficient (depressing consumption), the amount of gasoline used has dropped, even as we are spending 65% more on fuel overall.

This means that in order to meet the static and arbitrary amount of Ethanol, oil refineries will need to mix a higher percentage of the corn-based product into gas… and that’s a big problem.

The current mixture of Ethanol-to-gasoline is 10% (known as E-10), and many reputable outlets maintain that a higher percentage (E-15) will cause tremendous damage to engines. What’s worse, many manufacturers state that usage of the fuel will void owners’ warranties.

In order to avoid being sued, refineries have opted to purchase federal “credits” to make up for the ethanol they don’t blend. Those credits have ballooned in cost, and are up to almost $1/gallon this year. Oil refiner Valero estimates the purchase of the credits will cost it $750 million this year.

All of which means that a recent and barely reported decision by the Obama Administration is very, very suspicious.

Via Kimberley Strassel at the Wall Street Journal:

“EPA has approved a single small refinery/small refiner exemption for 2013, so an adjustment has been made to the standards to account for this exemption.”

In English: Of the nation’s 143 refineries, one (and only one) lucky player somehow had the pull to win itself a free pass from this government burden. Not only that, the rest of the industry gets to pick up its slack.

Well now, isn’t THAT interesting??

Wanna know what’s even more interesting? 

The Administration refuses to disclose the identity of this most fortunate “lottery winner”:

The agency not only refused to name the refinery in its rule, but also obscured certain numbers in the document to hide the beneficiary’s identity. An EPA press officer would not give me the name, citing “confidentiality restrictions.”

Oh, that’s just precious.

So, we have a completely arbitrary level of corn ethanol being mandated to be used, which will almost certainly necessitate a higher amount of ethanol to be blended into fuels, which will in turn cost refineries a bushel of money. As a result, the consumer (us) will get to pay even more for our gas, which (as an extra special bonus) might now damage our car’s engine.

Got all that?

And yet the Most Transparent Administration In History has allowed a single Get-Out-Of-Jail-Free card to one, single, solitary refinery, …whom they refuse to name.

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Just as with the closed GM dealerships and Obamacare waivers, it seems that access to this President is akin to having the Sultan’s ear. Rules are for the Little People, after all, and the Privileged Class need not concern themselves with such petty hindrances.

Or put another way, allow me to paraphrase George Orwell’s Animal Farm, and its most famous quote:

“All Animals Citizens are Equal, but SOME Animals Citizens are MORE equal than OTHERS.”