Repeal the Renewable Fuel Mandate
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By Michael James Barton
If you've filled your tank in the past few weeks, you've probably noticed the recent spike in gas prices. The national average price of regular unleaded is getting closer and closer to $4.00 a gallon.
One part of the price increase may surprise you. And that portion could add up to 50 cents per gallon to what you pay at the pump during the summer's peak driving months.
Higher gas prices are just one of the many unintended consequences of the Renewable Fuel Standard (RFS), which demands biofuels to be blended into the gasoline you buy. This ill-conceived policy is hurting American motorists, consumers, and farmers -- all to solve a problem that no longer exists with a solution consumers do not want. It's time for lawmakers to scale back the RFS before it does any more damage to your car and our economy.
Enacted in 2005, and expanded in 2007, the RFS was created on the assumption that increasing ethanol production at home would make the United States more energy secure. Frantic policymakers looked for an easy way out, and sought to create a market for renewables by establishing mandatory targets for the blending and sale of biofuels.
Under Congress's theory, renewables would become cheaper and more abundant -- eventually displacing costly fossil fuels. The energy crisis would be averted.
But all of these government predictions have proven off -- way off. Thanks to the fracking revolution, domestic energy production has surged even as new fuel-efficient technologies have caused gasoline consumption to decline. Meanwhile, next-generation biofuels haven't lived up to the promises their lobbyists have been claiming.
Yet the RFS keeps ratcheting up the amount of biofuels -- mostly ethanol -- to be added to the gasoline supply.
Last year, the government allowed a partial waiver, conceding the practical limits on ethanol blending. Lower demand for gas, relative to the amount of ethanol that's mandated, has already pushed energy producers up against the "blend wall" of 10 percent ethanol.
Despite the scientific evidence, the Environmental Protection Agency (EPA) has approved fuels with a 15 percent ethanol (E15) blend for use in newer vehicles. But auto manufactures warn that higher levels of ethanol -- which is basically a solvent -- could damage car engines, corroding metal parts (including carburetors) and degrading internal plastic and rubber components.
The EPA's assurances that this is safe ring hollow since you will be the one paying for these major E15 auto repairs out of your own pocket.
Ethanol is not only hard on engines -- it's also less efficient than regular gas. Ethanol contains 33 percent less energy than gasoline, which means vehicles will cover fewer miles per gallon, and consumers will need to fill up more often. The process of producing ethanol threatens water resources, and even emits greenhouse gas emissions at a higher rate than fossil fuels. All of this means we use more energy to produce a gallon of ethanol than we get from it -- a net loss for energy efficiency and the environment.
But the worst impact of RFS for the consumer is being felt at the grocery store. Since most of the ethanol used for fuel in the United States comes from corn, the mandate depletes the supply of feed for livestock, making it more expensive for farmers to raise cows, chickens, and pigs. Consumers end up bearing the brunt of prices made artificially high by the mandate.
Grocery prices are increasing and packages are getting smaller. Under the RFS, the average grocery bill for families has grown by $2,000 annually. Lower-income families, who spend a greater percentage of their paycheck on groceries, have been hit especially hard -- so much so that poverty advocates are now demanding that U.S. corn feed mouths rather than fuel tanks. According to Oxfam America, the grain required to fill an SUV's gas tank with biofuels is enough to feed one person for a year.
By dictating unrealistic levels of ethanol in our fuel supplies, the RFS will ultimately force refiners to raise the price of gasoline to pay fines to the EPA, unnecessarily spiking the cost of already expensive gas without any offsetting advantage.
We have tried RFS, and it has failed miserably to meet its goals while creating a host of costly new problems. At a minimum, the EPA should prevent further harm to Americans and scale back the mandate for this year. But if we are to undo the economic damage already caused by the RFS, what we really need is Congress to repeal this mandate.
Michael James Barton is the Director for Energy at ARTIS Research, and speaks around the country on energy and energy security matters. He previously served as the deputy director of Middle East policy at the Pentagon.