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Editorial comment

Following seven years of refiners’ repeated warnings about the badly flawed Renewable Fuel Standards (RFS), 2013 may prove to be a pivotal year for the future of the program. We were joined by a litany of groups including environmental, food and hunger, and engine manufacturers who voiced strong concern about this harmful public policy, and Congress and the Environmental Protection Agency (EPA) finally took notice.


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Last year the RFS was the subject of a number of white papers and reports that detailed the counterproductive nature of the program. The RFS was also the subject of six congressional hearings, and in November, the EPA for the first time, proposed rulemaking that would reduce the RFS ethanol volume obligation for 2014. While a step in the right direction, the EPA’s action doesn’t go far enough. I believe there remains solid bipartisan support for rectifying a law that is so fundamentally flawed that the only solution is to go back to the drawing board. Comprehensive reform, if not full repeal, would provide necessary relief from a mandate that places consumers at risk of high food and fuel costs, engine damage and environmental harm.

The RFS is just one of many important challenges that AFPM will focus on in 2014. We will also be responding to the Administration’s recent Executive Order (EO) that adjusted the metrics by which all Federal agencies assess the costs of carbon emissions, known as the Social Cost of Carbon (SCC) calculation. The EO is comprised of subjective metrics that were developed to try and quantify the alleged societal benefits of reducing only greenhouse gas emissions. Unfortunately, the SCC scheme inflates the potential benefits of regulatory actions in a manner that hides the true economic and societal costs of new rules. Applying these calculations to assess the costs and benefits of regulations could erroneously be used to justify discontinuing the use of traditional, affordable energy sources through overly stringent regulations in future rulemakings.

AFPM is prepared for the challenges, but equally prepared to take advantage of the many opportunities. The US is entering a manufacturing renaissance thanks to a shale revolution that has unlocked vast reserves of oil, natural gas and natural gas liquids (NGLs). These new supplies of natural gas and liquids have created affordable energy and petrochemical feedstocks used to make thousands of consumer products. For the first time in more than 30 years, America has secured a competitive lead in the manufacturing of petrochemicals, which is allowing our nation’s manufacturers to flourish. To maintain momentum, AFPM recently helped launch the American Shale & Manufacturing Partnership (ASMP), a diverse group of organisations and industries united in a singular goal of fostering this new American manufacturing renaissance.

The partnership will focus on workforce education and jobs creation, as well as policies and regulations that will foster a sustainable manufacturing renaissance. Already, more than US$ 100 billion dollars in planned manufacturing infrastructure development has been announced for the next decade. This development will bring jobs in the near term as construction projects are planned, and even more in the future once facilities are built and up and running.

Without question, the next 12 months will present numerous challenges for the oil and natural gas industries as the Obama administration hurries to try and implement new industry regulations before the clock runs out in 2016. We are fortunate that our membership understands that every contentious issue must be met with persistent determination and resources, and AFPM stands ready for a successful year.