Energy's Crossroads

Energy policy too important to be left to politicians, says Petrowski

Greg Lindenberg, Editor, CSP

SAN ANTONIO, Texas -- "Getting energy policy right in this country is absolutely critical," Joe Petrowski, CEO of Newton, Mass.-based brand Gulf Oil and convenience chain Cumberland Farms, said at the Renewable Fuels Association's annual ethanol conference in San Antonio, Texas, last week. He admonished the attendees, "Do not leave it to the people in Washington and the statehouses. They will not design good policy."He said that the ethanol industry "sits at the crossroads of agriculture and energy," and he argued that "ethanol and biofuels have a right to stand proud and are a [image-nocss] key part of our energy future."

He added, "As much as gasoline touched $4, if we weren't producing nine billion gallons of ethanol last year, I just don't know where we would have gone in price.... We produce more ethanol in the United States today than OPEC member Indonesia produces oil. So we can't take ethanol out of the pool."

Gulf sells 250,000 barrels a day of petroleum products in the Northeast and blends about 20,000 barrels a day of ethanol. It was the second company in Massachusetts to put in an E85 station. The company has seven E85 stations in New York. Petrowski said Gulf as a company is "fuel agnostic." It got rid of its refinery in the early 1990s, and does not have any production.

He called ethanol an "emotional" issue, but he said it was not emotion that drove him to champion the use of ethanol. "I didn't do it for the American farmer, I didn't do it because I feel warm and fuzzy about my agricultural roots; I did it because it was mandated in many of the areas and it made economic sense. I also happen to believe it's good public policy. We need to have ethanol and biofuels break the back of petroleum's stranglehold on the transportation sector," he said.

Petrowski said that believes in energy diversification. The transportation sector is 96% dependent on petroleum, he added. "The hysteria we see in the energy markets is because of that stranglehold. No other sector has that amount of dependence. It should be job No. 1 to break the back of that dependency. Biofuels are the quickest, most economic, environmentally friendly and positive way we can do that."

In his half-hour presentation, he laid out what he wants the government to do in terms of energy. He wants it to develop the flex-fuel infrastructure. "We have 165,000 gas stations in the United States. Generally, there are probably 16,000 that are being renovated every year. We can [put that infrastructure in place] very cheaply by putting in programs, tax credit, grants."

He does not object to subsidies. "Subsidies to certain industries that serve the national interest are as old as the republic itself," he said, "and this industry should not be shy about demanding a place at the table.... There is nothing the ethanol business has to be ashamed about."

Petrowski also thinks that the government should increase motor fuel taxes, although he said now is not the right time because of the bad economy. He said, "We have to decide, do we want to raise money with taxes, or do we want to change behavior? We're not going to change behavior unless we have developed alternatives to carbon-based fuels like petroleum. So I'd like to increase the motor fuel tax, but I'd like to give exemptions to biofuels. That way, we're encouraging people to go to not only higher-mileage vehicles, but we're encouraging people to use alternative fuels besides petroleum."

But he doesn't want the government getting into the minutia of how to run the ethanol industry. "I don't want the U.S. government involved in telling us what feedstock should feed our ethanol business. We're going to have mandates for corn ethanol, cellulosic ethanol. That's not government's job; they're incapable of doing it." He said the government should be doing "big picture" things such as giving tax credits and incentives.