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The Environmental and Economic arguments for refienery subsidies

|Includes: CLARCOR Inc. (CLC), ORA

     Most of the methods for reducing air pollution are doing so by providing penalties, pushing up costs by adding regulation and in some cases causing plants and jobs to go overseas to areas where the pollution laws are less effective thereby completely negating any co2 benefit.  The refinery structure itself is older technology in the same state as the electric grid, where there is newer technology to increase yields and to create new bi-product technologies that would help clean the air and increase our energy supply.  The other problem that may occur in this environment is that refinery companies could have a major financial hit due to a purposed switch to natural gas that would hammer diesel demand thereby making it hard for them to pay for extra pollution control and perhaps bankrupting some refineries
    Algae technology is one such technology where pollution is reduced and supply is increased.  Even if algae oil itself is not ready to be commercialized (public companies such as clarcor clc and partners are already building equipment with state subsidies), it can be used for bio-gas (perhaps with included sources in the food and waste business) and will make the air cleaner thereby reducing the need for boutique fuels that are helping to push up the cost of gasoline.  When the algae technology becomes available you have a source of either bio-crude that will create cleaner gasoline and create more supply thereby having an effect on price or it could go to bio-diesel where it could effect diesel prices as well as deflationary effect on various oil prices such as corn oil or soybean oil that are currently used in bio-diesel.
     There are tremendous amounts of waste heat that are burned off in flares that could perhaps be brought closer to the ground where technologies such as those from oratek ora or another equipment manufacture could be used to increase our electric supply without increasing green house gasses.  This could be another useful source of electricity that we are likely to need when puv's (plug in hybreds come out later this year) and electric cars become more common.
     There are new technologies that come out all the time to increase the yield generated from each and every barrel of oil.  If you make the upgrade more inevitable you increase the amount of research that goes into these niche products, thereby funding research without directly putting it into the subsidy. 
     It could be argued that it is part of the cost of driving, using electricity and natural gas and the cost can be spread out where the benefits of having more supply and reducing the need for more expensive boutique fuels would help reduce (or even pay for itself) rather than put the cost on business where it reduces the tax base  and has a negative environmental effect by benefiting less desirable refiners (and subsidize consumers who pollute more) in other countries.

full article here

Disclosure: long both clc and ora