Wednesday, May 16, 2012

Palm Oil Biofuels Under the Renewable Fuels Standard

March 29, 2012

The Honorable Lisa Jackson
Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460

Re: The Treatment of Palm Oil Biofuels under the Renewable Fuels Standard from the African American Environmentalist Association (AAEA); Docket ID No. EPA–HQ–OAR–2011–0542

Dear Ms. Jackson:

            The African American Environmentalist Association (AAEA), a national association dedicated to ensuring the input of African Americans and other minorities into public discussions of energy policy. We focus on regulations, taxes, trade policies, monetary policies, and environmental issues as they relate to energy policy. AAEA is dedicated to protecting the environment, enhancing human, animal and plant ecologies, promoting the efficient use of natural resources and increasing African American participation in the environmental movement..

            AAEA is a strong advocate for U.S. energy prosperity and our organization raises awareness of the costs and consequences of policy changes for consumers. We believe it is important to ensure that minority communities are not burdened by artificially high energy costs. We also believe minority communities should be free to exercise a full range of choices in the marketplace, unburdened by short-sighted regulation or market manipulation..

            To that end we stand in firm opposition to the EPA’s recent decision to penalize palm oil under the Agency’s management of the Renewable Fuels Standard.  Palm oil is by far the lowest-cost biodiesel fuel source on the international market. By not allowing the lowest cost vegetable oil into the U.S. biofuel market, the EPA is ensuring that the RFS2 will lead to significantly higher prices at the pump as blenders rely on more costly vegetable oil feedstocks, like soybean oil and canola.

            Blocking its trade in the United States will unduly burden poor and minority communities.  Minority communities are among those most sensitive to inflation in energy prices.  Energy expenditures account for a far greater proportion of total expenditures in minority households than they do in other households. As such, minority communities are rightly concerned about any policies that threaten to raise energy costs.

            We have already seen the baleful effects of higher energy costs in recent months as prices paid at the gas pump have risen steadily. These price increases have meant minority households have had less money at their disposal for food, clothing, shelter, education, health care, savings and investment, and more. The EPA’s decision will make an unfortunate situation worse.

            Since minority groups face a relatively disproportionate burden when energy prices rise, minority communities have long been interested in a diversity of energy choices. More choices means more options when prices of one fuel rise. More choices means greater predictability and security when it comes to planning for the future. Restricting choices means minority groups are acutely vulnerable to price shocks in other sectors of the energy market. 

            In addition to minority households, minority-run and operated businesses and their workers are also keenly interested in policies regarding energy availability and affordability. For example, truckers and independent rail and transportation owner operators are significant consumers of diesel energy, including biodiesel.  Many of these workers are minorities, and many of the businesses are minority owned and managed.  Indeed, the transportation sector has been important to ensuring upward mobility and economic growth for minority communities.

            As such, denying these communities the widest range of options in the energy market reduces their flexibility and their earnings prospects. It makes it more difficult to plan for growth, to hire workers and to expand operations that create opportunities and jobs for others.

            The advance of sophisticated biodiesel systems is one of the most promising technological developments in recent memory. It promises to lower costs and generate long-run efficiencies that will benefit all stakeholders. But the full promise of biodiesel will not be realized without ample global competition and diversity of supply. As such, the EPA would be wise to avoid manipulating the market for biodiesel and let competition and consumer choice determine the ultimate shape and contours of market.

            While we appreciate the EPA’s interest in ensuring a healthy domestic environment, we believe its rush to penalize foreign biofuel will do little to help America’s ecology and a great deal of harm to America’s minority communities. The EPA should reconsider its decision. 

                                                                                                Sincerely yours,

                                                                                                Norris McDonald

                                                                                                Norris McDonald

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