There’s an old saying: if it sounds too good to be true, it probably is. In California, we seem to have an addiction to believing that if a new “green” product sounds good, it must be good. But ironically, its success can only be achieved through a legislative requirement. Never mind actual performance.
Such is the case with SB 916 (Correa), a bill that would ban conventional engine lubricating oil in California and mandate a new blend containing at least 25% “biosynthetic” content. This new oil is engineered from crops like soybeans. Now this may seem like a good idea, but the reality is SB 916 is likely to cost consumers millions of dollars not only in the form of higher prices for products from motor oil to milk, but for equipment failure as well.
Biosynthetic oil blends have not been certified to ensure that they can be safely used in modern vehicles and engines. Their use could void your engine warranty. Such a certification process typically takes years of testing before a product is shown to meet the industry performance standards that prevent engine damage and maintain manufacturer warranties. In other words, consumers will be forced to buy products that are likely to nullify their equipment warranty. And buyers will have no choice, since the state will have made lubricants without the mandated level of biosynthetics illegal.
Promises of any environmental benefits are likewise unproven. It is not clear that biosynthetic content will make engine oil significantly more biodegradable than it is now. And the new biosynthetic-blended products would still be classified – and regulated – as pollutants under the Clean Water Act, while disrupting the State’s used oil recycling program.
But the technical and environmental inadequacies of SB 916 are just the beginning.
SB 916 will create a statutory demand for an amount of biosynthetic oil that far exceeds the ability of the biosynthetic lubricants industry to supply. It’s basic economics: When demand surpasses supply, prices go up. The lopsided equation of mandated usage and available supply could lead to millions of dollars in higher costs for consumers. It could also mean higher costs for schools, state and local governments, as public fleets will be subject to the mandate. Diversion of large amounts of food crops to produce biosynthetic oil will also affect the food chain.
With so many uncertainties still surrounding biosynthetics, why the rush to mandate them before they’re ready for prime time?
A not-too-subtle clue is that SB 916 is sponsored by Irvine-based Biosynthetic Technologies, Inc., a company which has various patents and pending patents on – you guessed it – the very type of biosynthetic engine oils required under the bill.
So the inevitable outcome should SB 916 become law is all too predictable: more cronyism driving consumers in both the private and public sectors to spend millions of dollars in higher prices for unwarranted products in short supply that could damage their engines, leading to even more expenses for equipment repair or replacement, and no appreciable environmental benefit.
SB 916 is too good to be true for everyone except the corporate sponsor for whom it will eliminate competition and guarantee a perpetual market share. It deserves a sound and speedy defeat.
Tom Tanton is Policy Director for the Coalition of Energy Users and Director at Energy and Environment Legal Institute. He has forty years’ experience in energy and environmental policy.