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By Robert Rapier on Jan 27, 2010 with no responses

Our Tax Dollars at Work

First off, a couple of announcements. After being able to stay at home for the past two months, I have a very heavy travel schedule over the next two weeks. My participation here will probably be limited. I am off to Seattle tomorrow, on to the Netherlands from there, will visit Switzerland and Germany, back to the U.S. mainland, on to Canada, and then back to Hawaii. I have essentially piled up eight visits I need to make into one big, exhausting trip. My ability to post and respond to comments and e-mails will be spotty at best.

Second, my first essay went up yesterday at Forbes: The Price of Energy. My intention is to put something up there every week or two, and my primary goal is to be educational with the essays. I don’t plan to do any major debunking of company claims there, although I will still do that here occasionally. I will generally first post the stories targeted for Forbes on my blog, modify as appropriate based on the comments (in the case that something is incorrect or unclear), and then post it at Forbes.

Now, on to today’s story. Yesterday I saw a story on what is one of the silliest ideas I have ever heard from a politician. It isn’t the first time I have heard it mentioned, but I believe it is the first time one of our legislators actually announced they were going to take action on it:

Braley Announces Legislation to Require Country of Origin Labeling for Fuels

Washington, DC – In an address to the Iowa Renewable Fuels Association today, Rep. Bruce Braley (D-Iowa) announced he will introduce legislation to require country of origin labeling for fuels. Braley will introduce the bill, Country of Origin Labeling (COOL) for Fuels, tomorrow when he returns to Washington, DC.

The bill will require the Department of Energy to conduct a study and implement its recommendations to ensure American consumers have the ability to decide at the gas pump whether they want to purchase domestic fuel products, such as biofuels produced in Iowa, or gasoline produced in hostile nations that many terrorists call home.

“When we fill up our vehicles, there’s no existing method for us to know where the fuel we’re purchasing comes from and which nations are deriving the economic benefit from that purchase,” Braley said. “When we put food in our bodies or clothes on our backs, we know exactly where those products come from. Americans should have the same opportunity to vote with their wallets at the gas pump.

The intent of the bill is not the reason this is a dumb idea. I think most people would appreciate a choice of the country of origin for their fuel. We would ideally prefer that fuel to be sourced domestically (unless of course we have to pay a premium for it), and beyond that many would prefer to buy fuel from Mexico over Venezuela. So to be clear, I understand the spirit of the bill.

The silly part comes about in the attempted execution. The petroleum supply chain does not segregate products by country. Sure, a supertanker may leave Saudi Arabia with 100% Saudi crude, but once it arrives it gets mixed with whatever else may be left in the pipelines and crude tanks. Then, as it goes through the refinery, there are streams from many different sources. Finally, when it goes into the pipeline and on to the retailer it gets mixed with products from many different locations. In fact, in many places the fuel you put in your car has portions from many locations.

There are exceptions; the Billings Refinery I used to work at only got crude domestically or from Canada because no supertankers have access to the refinery. But then once product ships to Denver or toward the West Coast, it will inevitably mix with product derived from elsewhere (e.g., product coming up from Texas to Denver will probably contain some Venezuelan crude).

I wonder if one of our government leaders will figure out that essentially all of the corn ethanol produced in the U.S. today is enabled by petroleum, and that petroleum is inevitably sourced from imports. So I suppose the corn ethanol should be labeled as well: “This ethanol was enabled by Saudi/Venezuelan/Russian crude.” No, I suppose we will keep that skeleton in the closet.

The purpose of this bill from the Congressman from Iowa is of course to try to tilt the playing field in the direction of corn ethanol. That’s understandable, as that is his job. But the idea is either very poorly thought out, or it is just an example of him posturing for his constituents.

I don’t believe this bill has any chance of passing, but presuming for a moment that it did, the labels would all have to look like those food labels that say something like “This food was processed in a facility that also processed peanuts. It may have in fact touched peanuts at some point.”

Our product label would read like “This crude may have been sourced from the U.S. and/or one or more of the following 30 countries…” This would appear on every gasoline and diesel pump in the U.S., and would therefore be ignored by everyone. In other words, trying to pass such a bill is simply a waste of time and taxpayer money.

Note: This story was also characterized very well at Bnet by Kirsten Korosec:

Label My Crude: Iowa Congressman Wants Americans to Know Where Their Fuel Was Born

In that essay, Kirsten pointed out the impracticality of implementing such a plan, and also linked back to my essay on the Top 10 suppliers of crude to the U.S. to show readers where U.S. crude imports actually do come from.