As the Obama administration begins laying out its view of the energy future for the United States, industry groups should step up and speak against policy prescriptions that are not market-based and particularly those that will not help to achieve the country’s energy security goals, according to an industry executive.
Joe Petrowski, chief executive of Massachusetts-based Gulf Oil and Cumberland Farms, argued during an ethanol conference last week for market-based solutions to the country’s energy problems, and criticized efforts by Congress and the Obama administration to limit domestic drilling of oil and natural gas.
But he offered full support for biofuels, saying ethanol was going to play an important part as a transportation fuel in the future. He said ethanol would be one of the many energy sources, which would still include oil and natural gas.
“Designing energy policy for the future is critical and should not be left to politicians in Washington and in state houses,” Petrowski said at the Renewable Fuels Association’s 14th annual ethanol conference that was held in San Antonio, Texas. “We need the government to provide [broad] mandates and offer tax incentives. But I don’t want the U.S. government telling us where to drill and which feedstock we should use for ethanol.”
Gulf Oil, which is based in Newton, Mass., operates gas stations, while Cumberland Farms, which is based in Canton, Mass., operates convenience stores in the Northeast and Florida. Petrowski heads both companies.
Petrowski criticized recent calls for an increase in the gasoline tax. Those calls have grown louder in recent weeks, mostly from liberal groups, after the National Commission on Surface Transportation Infrastructure Financing, a 15-member panel created by Congress in early January, said higher fuel taxes were needed to finance highway construction.
The commission recommended a 10cts per gallon increase in federal taxes, saying the current 18.4cts gasoline and 24.4cts diesel taxes fail to raise enough to keep pace with the cost of road, bridge and transit programs. Others have said raising taxes would make people drive less, which would be good for the environment and would also help reduce U.S. imports of Middle East oil.
The federal taxes are in addition to fuel taxes levied by states. Currently, the combined federal and state tax in the U.S. averages 45.0cts for gasoline and 50.8cts for diesel fuel.
But Petrowski, whose company neither refines nor produces oil, said that raising fuel taxes in the middle of a recession wasn’t a smart idea.
“We won’t change [driving] behavior unless we develop alternatives to petroleum,” he said.
Gulf Oil sells about 250,000 gallons of ethanol regularly as part of ethanol-blended gasoline in New England even though some states, like Mass., are not covered by the federal ethanol mandate, he said.
He also answered critics of ethanol, saying the industry was important to national energy security and deserved the federal tax credit and other subsidies it has received over the years.
“Industries that serve national interest have always gotten subsidies and so this [ethanol] industry shouldn’t be ashamed about getting subsidies,” he said.
He added that cellulosic ethanol, though still at an early stage, had a bright future if the government helped in improving the infrastructure.