With green governments asserting more and more control over energy markets, you need a scorecard to keep track of the players. This week’s green pariah can be next week’s rent-seeking sellout — if the price is right. Auto companies were once fierce opponents of federal mpg laws. Today, auto execs like Ford CEO Alan Mulally are cheerleaders for the EPA standard. Will the oil industry buckle next?
Watch Valero Energy Corp, one of the country’s refinery giants.
Valero is Green Enemy #1 as it rides point against California’s draconian cap-and-trade global-warming law mandating CO2 reduction of 15 percent below current levels by 2020. Cap-and-trade is anathema to Big Oil’s electricity-hungry refineries. So Valero has poured $500,000 into a California ballot initiative that would halt the Governator’s pet law. Valero is also a vocal opponent of federal cap-and-trade laws.
But isn’t this the same Valero that last year acquired ethanol giant VeraSun and is now a leading ethanol producer? And isn’t Big Ethanol in bed with the EPA on a Renewable Fuels Standard of 15 percent ethanol use in gasoline to fight global warming?
Yes and yes. And yes, this has Valero straddling historic enemies oil and biofuels. With corn-ethanol puppets like Barack Obama in the White House, oil giants like Valero seem increasingly resigned to a biofuel reality.
Valero has not yet taken a position on the ethanol mandate and is not yet a card-carrying member of the Renewable Fuels Association, the Big Ethanol trade group at odds with Big Oil. But the RFA’s Matt Hartwig says “I think the days of oil and ethanol not mixing are over. I think each of us recognizes the importance of the other, to the long-term success of each industry.”
Once upon a time the auto industry was Green Enemy #1. Today, thanks in part to giant taxpayer subsidies, it has been bought off. Every industry has its price, it seems. So keep an eye on Valero.