EDITORIAL Fuel politics in France

The politics of vehicle fuel strikes again, this time in France.

Prime Minister Alain Jupp says a clean-air draft law due next month will require that gasoline and diesel fuel contain oxygenates from agricultural sources. The mandate, he declared at a meeting between government ministers and agricultural representatives, will ease urban air pollution.

Refiners in the U.S. will note a familiar polemic. They must oxygenate vehicle fuels with substances made from grain in service to an environmentalist rationale that goes far beyond true environmental gain. Mandates for biologically derived oxygen in fuels are nearly always political favors to farmers and oxygenate makers.

Wrong remedy

So it goes in France. Adding oxygen to vehicle fuel will do more harm than good in French cities, where recent studies show pollution problems to be oxides of nitrogen, surface ozone, and particulates. The pollution type that oxygen can indeed help to remedy is carbon monoxide, which is a waning and minor problem in urban France.

Whatever secondary benefits oxygenates produce are offset by the boost they give to fuel volatility, which increases evaporative emissions. And those emissions aggravate ozone pollution.

So adding oxygenate to vehicle fuel will address a problem that doesn't exist to a significant degree in France and aggravate one that does. Recognizing the absence of potential air quality gains, environmental groups resist the move because they fear it will increase use of agricultural fertilizers. But it is the agricultural constituency, not environmentalists, that Jupp wants to please.

European governments have been cutting benefits of an agricultural set-aside program established by the European Union (EU) in 1992 to compensate farmers for cuts in agricultural price supports. The EU took the step to comply with limits on subsidized exports established by the old General Agreements on Tariffs and Trade (GATT).

Lately, grain prices have been higher than the EU projected when it established the set-aside program, which means farmers could be producing from set-aside acreage and exporting the yield without subsidy. Instead, governments are paying them not to do so. This compounds budget difficulties of those, such as France, straining to meet 1999 fiscal targets for European economic and monetary union (EMU).

So the EU has been trimming farm set-asides at the same time Jupp has been trying to squeeze France into EMU fiscal shape. Domestic resistance to the prime minister's exertions last December took the shape of crippling urban strikes. Fresh from his partial capitulation to turmoil in the cities, Jupp hardly wants to tangle with politically testy French farmers. Their protests in 1993 nearly derailed ratification of the Uruguay round of trade negotiations, which turned GATT into the World Trade Organization.

So Jupp promises to require as-yet unspecified volumes of so-called biofuels in gasoline and diesel-for political reasons described as environmental ones. And he overlooks measures that might really reduce urban air pollution, such as adjustments to unbalanced fuel and vehicle taxes that now favor diesel fuel, a disproportionate contributor to the types of pollution that do trouble French cities.

Consumer interests

France's big refiners, Elf and Total, both have begun small biofuels programs, taking advantage of tax exemptions needed to make the fuel additives commercial. But both companies oppose volumetric requirements.

Well they should. Like all biofuel mandates, France's imminent measure will help favored political constituencies at the expense of fuel consumers, who can be tricked into believing the measures have environmental value and confused into overlooking the costs. If oil companies don't attend to their customers' interests in the seedy politics of vehicle fuel, no one else will.

Copyright 1996 Oil & Gas Journal. All Rights Reserved.