STAFF CONTACT :
The Business Council opposes this legislation that would prohibit the sale of ultra low sulfur diesel fuel unless it included bio-diesel as a lubricant additive.
The Business Council opposes this legislation for a number of reasons:
- It would create another New York State "boutique" fuel - i.e., state-level mandates on fuel that are contrary to federal requirements. Generally, motor vehicle fuel is refined, blended and sold on a national market. When a state imposes inconsistent requirements, they create the likelihood for price increases and supply disruptions. New York went through this exact same issue earlier this year with our prohibition of MTBE.
- It will impose additional costs on New York state consumers and businesses alike. Studies indicate that a blending of 5 percent bio-diesel could increase diesel fuel by up to $.08 per gallon. At a time when the price of diesel fuel has topped $2.00 per gallon in some New York markets, it is absolutely the wrong time to be imposing these additional costs on the state's economy.
- Its environmental benefits are questionable. Federal and university studies indicate that while bio-diesel may reduce some emissions, it would increase emissions of hydrocarbons and NOx - the latter being of special concern, given the recent reclassification of several upstate areas as being in non-attainment of the new 8 hour ozone standard.
In short, this proposed mandate would primarily benefit manufacturers of bio-diesel, while imposing additional costs on the rest of the state's economy.
If the New York State legislature wants to subsidize the development of alternative fuels such as bio-diesel, it should be done through mechanisms such as targeted tax credits, not by imposing additional costs on the statewide economy through alternative energy purchase mandates.
For these reasons, The Business Council opposes approval of S.7528.