Oh, noes: 80 percent of biofuels producers have cut back production due to federal-mandate uncertainty
posted at 6:01 pm on May 15, 2014 by Erika Johnsen
Well, who woulda’ thunk it? The Environmental Protection Agency finally decided to acknowledge the incompatibility of the Renewable Fuel Standard with both America’s declining gasoline consumption and the environmental degradation caused by the production of corn ethanol, thereby obliterating the entirely government-imposed “market” for biofuels — and what do you suppose happens? Via The Hill:
Almost eight in 10 biodiesel producers in the United States have cut back production this year due to uncertainty over federal policies that encourage making the fuels, the National Biodiesel Board (NBB) said.
The report released Wednesday was based on a survey the NBB conducted. In addition to the finding that 78 percent of producers reduced output, 57 percent of companies have idle or shut down plants and 66 percent have reduced their workforces or are considering it.
Almost all of the surveyed companies attribute the industry’s decline to two recent policy developments: the expiration at the end of last year of the tax credit to produce biodiesel and a proposal last year by the Environmental Protection Agency not to increase the biodiesel mandate in the Renewable Fuel Standard.
“Inconsistency in Washington is wreaking havoc on the U.S. biodiesel industry,” Anne Steckel, NBB’s vice president of federal affairs, said in a statement.
“Inconsistency in Washington is wreaking havoc on the U.S. biodiesel industry”? …Yeah, how about we go a little more big-picture and try, “The U.S. biodiesel industry’s utter dependence on handouts from Washington is wreaking havoc on the U.S. biodiesel industry,” perhaps? This major slowdown in production is precisely why, when the EPA announced late last year that they would be reevaluating the annually-increasing volumetric requirements mandated by the Renewable Fuel Standard for 2014 (a decision on which we’re still waiting, by the way), the biofuels industry flipped out — and their respective lawmakers have been engaged in a relentless pander-fest ever since, most recently at a Capitol Hill press conference on Wednesday including Democrat Sens. Heitkamp, Durbin, Klobuchar, Franken, Donnelly, and Cantwell:
“We want to make sure that biofuels are included in the future when it comes to America’s energy,” Durbin said. “When there’s uncertainty about the future of biofuels, there’s uncertainty about these jobs.”
Klobuchar and Franken said Minnesota officials have estimated that the EPA’s biodiesel mandate would cause the state to lose 1,500 jobs.
Yes, it’s always very easy to talk about the tragic loss of the jobs that have been created via direct federal largesse, but what these senators aren’t talking about is the opportunity cost, i.e. the other jobs that would have been created in other and more useful areas of the private sector, if the federal government wasn’t depriving taxpayers of those dollars in the first place. Much like the huge dropoff in the egregiously subsidized wind industry without the surety of their finely tuned array of precious subsidies, the fact that biofuels producers are cutting back without their own mandates and subsidies firmly in place should serve as a red flag about the real and economically (not to mention environmentally) costly nature of this industry.
Breaking on Hot Air