Big Ethanol: The RFS can help mitigate gas prices! CBO: The RFS is going to cause higher gas prices.

posted at 8:41 pm on June 26, 2014 by Erika Johnsen

Well, this is rich.

In light of the recent political turmoil in Iraq and the potential for disruption to the global oil supply, Big Ethanol would like you to know that the Renewable Fuel Standard — i.e., the mandate through which the federal government forces you to buy ethanol by forcing U.S. refiners to blend an ever-increasing volume of so-called biofuels into the country’s oil supply — is a great way to enhance our domestic energy security and mitigate the impact of any surges in gasoline prices. They even made an advertisement about it, via HuffPo:

The liberal group Americans United For Change released a new television ad Thursday tying the fight over domestic renewable fuel standards to the situation in Iraq.

The ad highlights concerns that the current violence in Iraq may cause an increase in gasoline prices. “More chaos over there means higher prices here,” the ad warns. …

The group said the ad buy is worth $400,000. The ads will run in the Washington, D.C. area this Sunday during “Meet the Press,” “Face the Nation,” “This Week,” “Fox News Sunday” and “60 Minutes.” They will also run on MSNBC, CNN and FOX News next week. In addition, the group said it’s planning an “aggressive digital media campaign.”

When Congress first enacted and later expanded the Renewable Fuel Standard in 2007, lawmakers were relying on the crucial assumption that Americans’ demand for gasoline would continue to increase ad infinitum. Instead, innovation, greater fuel efficiency, and an economic recession resulted in slackening demand for gasoline, making the RFS’s requirements and the inherent subsidy for ethanol producers therein costly and unworkable for everybody else. The EPA finally started to acknowledge this reality last year and is currently mulling over whether to relax the requirements for 2014; that’s an eventuality that the Big Ethanol lobby desperately wants to avoid, and it’s trying to capitalize on the Iraqi instability to gin up more support for the mandate that sustains the bloated ethanol industry.

We already knew that the ad’s argument that ethanol means “less pollution” is totally bogus, but as for this latest claim about the Renewable Fuel Standard being a helpful policy to put downward pressure on gas prices? Yeahhhh… no, via The Hill:

Gasoline’s price will increase up to 9 percent, and diesel fuel will rise by up to 14 percent by 2017 because of the Renewable Fuel Standard (RFS) if Congress does not repeal it, the Congressional Budget Office (CBO) said Thursday.

The CBO’s analysis estimated that, in order to comply with the increasing mandates called for under the Energy Independence and Security Act, fuel refiners would have to more than triple their use of advanced biofuels by 2017, and would have to use much more ethanol in gasoline than the 10 percent blend that older vehicles can tolerate. …

The agency predicted that the Environmental Protection Agency, which oversees the RFS, will keep the mandate levels similar through 2017, since increasing them “would require a large and rapid increase in the use of advanced biofuels and would cause the total percentage of ethanol in the nation’s gasoline supply to rise to levels that would require significant changes in the infrastructure of fueling stations.”


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Food prices going up too. Bourbon too.

rbj on June 26, 2014 at 8:53 PM

My electric bill tripled last winter Dec and Jan and Feb bills…

Buck Ofama

Scrumpy on June 26, 2014 at 8:54 PM

What is the benefit of paying people to raise food so it can bypass our tables and be processed ONLY to be put in our fuel tanks?

Why doesn’t someone come up with a way to take our trash, which fills landfills DAILY, and is further composed of stuff we obviously do NOT want any longer, and process THAT to put in our fuel tanks? Win for the environment, win for the environmentalist whackos, AND we can increase the food supply here in country AND around the world to ease world hunger?

For the children…

Make it ALL private sector, possibly a tax break for research and developement and NO FEDERAL GRANTS, SUBSIDIES OR HANDOUTS!

Strictly. PRIVATE. Sector.

Newtie and the Beauty on June 26, 2014 at 9:02 PM

OT

http://www.bbc.com/news/world-middle-east-28033684

Mr Maliki also said that Iraq had bought a number of used Sukhoi fighter jets from Russia and Belarus.

He said the aircraft could be flying missions in Iraq “within a few days”.

Russian President Vladimir Putin discussed the crisis with Mr Maliki by phone last Friday, the Kremlin reported on its website at the time.

Mr Putin confirmed his “full support” for the government’s efforts to rid Iraqi territory of “terrorists”, it said, without giving details.

sharrukin on June 26, 2014 at 9:07 PM

Why doesn’t someone come up with a way to take our trash, which fills landfills DAILY, and is further composed of stuff we obviously do NOT want any longer, and process THAT to put in our fuel tanks? Win for the environment, win for the environmentalist whackos, AND we can increase the food supply here in country AND around the world to ease world hunger?

That would make way too much sense Newtie. And there is probably no money in it for the political class.

crankyoldlady on June 26, 2014 at 9:07 PM

It’s true, my granddaughter, back in the day we used to put food in our gas tanks.

John the Libertarian on June 26, 2014 at 9:10 PM

Why doesn’t someone come up with a way to take our trash, which fills landfills DAILY, and is further composed of stuff we obviously do NOT want any longer, and process THAT to put in our fuel tanks?

Newtie and the Beauty on June 26, 2014 at 9:02 PM

Clearly you’re speaking of Mr. Fusion. “Where we’re going, we don’t need roads…”

John the Libertarian on June 26, 2014 at 9:12 PM

** Erika **,…..while were on Energy,..I’ll save sending you an
Email:)
=======

https://twitter.com/AP

The Associated Press @AP · 6h

Calif. wind farm to become first in US to avoid prosecution if eagles are injured or die by giant turning blades: http://apne.ws/1vaaOIs
==============================================================

The Shiloh IV Wind Project LLC, 60 miles east of San Francisco, will receive a special permit

allowing up to five golden eagles to be accidentally killed over five years.

Previously, such a violation could potentially draw criminal charges and discourage private investment in wind farms known for catching birds in their rotors.
=============

http://hosted.ap.org/dynamic/stories/U/US_WIND_ENERGY_EAGLE_DEATHS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT

canopfor on June 26, 2014 at 9:13 PM

https://www.youtube.com/watch?v=S5ZSDCvUwN8

Socratease on June 26, 2014 at 9:14 PM

Strictly. PRIVATE. Sector.

Newtie and the Beauty on June 26, 2014 at 9:02 PM

The liberal Democrats can not run their lives without a government bureaucracy runnin’ it for them. Nothing, (in their minds), can be run by the private sector. Herein lies the sickness of liberalism.

Rovin on June 26, 2014 at 9:15 PM

In light of the recent political turmoil in Iraq and the potential for disruption to the global oil supply,
====================================

Jonathan FaheyVerified account
@JonathanFahey

AP reporter covering energy — oil, natural gas, coal, nuclear, wind, solar, biofuels — and other major business news. http://bit.ly/1yf9AjF

Jonathan Fahey @JonathanFahey · Jun 25

Ruling could help US boost already huge petroleum exports. My story w/ @dinacappiello http://m.apnews.com/ap/db_268793/contentdetail.htm?contentguid=hANZAPkZ

Retweeted by Jonathan Fahey
Rob Wherry @RobWherry · Jun 25

Big Oil is spending more to get crude out of the ground but is getting less return for its investment. $XOM $COP $CVX

Jonathan Fahey @JonathanFahey · Jun 24

National average gasoline price down for the first time in almost two weeks, to $3.68.

Could that be it for the Iraq bump?

canopfor on June 26, 2014 at 9:16 PM

National average gasoline price down for the first time in almost two weeks, to $3.68.

Could that be it for the Iraq bump?

canopfor on June 26, 2014 at 9:16 PM

We’ve been at or above $4.33 for over two months now canopfor. It only “bounces down” in the cities.

Rovin on June 26, 2014 at 9:23 PM

We’ve been at or above $4.33 for over two months now canopfor. It only “bounces down” in the cities.

Rovin on June 26, 2014 at 9:23 PM

$4.79 here.

crankyoldlady on June 26, 2014 at 9:29 PM

$4.79 here.

crankyoldlady on June 26, 2014 at 9:29 PM

Good Lord, dear, where do you live?

Today in Corpus Christi, TX, I paid $3.13 at HEB, with the 11 cent gift card discount. But I’ll admit regular went as high as $3.41 a while back.

Dolce Far Niente on June 26, 2014 at 9:43 PM

canopfor on June 26, 2014 at 9:16 PM

We’ve been at or above $4.33 for over two months now canopfor. It only “bounces down” in the cities.

Rovin on June 26, 2014 at 9:23 PM

Rovin: Propy-ganda maybes!!:)

Were at $1.43 a litre/ $6.50 Imperial gallon.

http://www.ontariogasprices.com/Sault_Ste_Marie/index.aspx

canopfor on June 26, 2014 at 9:51 PM

There is no upside to the ethanol program, so I expect the Leftists to continue its expansion.

ROCnPhilly on June 26, 2014 at 9:56 PM

canopfor why did I think you lived on the west coast near Vancover. Had know idea you lived in Ontario.

D-fusit on June 26, 2014 at 9:59 PM

Gas will hit $5, but nobody will care because food prices will double.
And Q1 was -3%….

Recession 2014 begins.

Tard on June 26, 2014 at 10:15 PM

$3.59 here, with 2 cents off with your grocery card. Kansas

Mariadee on June 26, 2014 at 10:58 PM

It is LONG PAST TIME to shut down this foolish and destructive mandate! All it does is discourage rational fuel choices and run up both fuel and food costs for everybody.

landlines on June 26, 2014 at 11:56 PM

This RFS crap has got to go. I’m tired of hearing that gas prices jumped because “the refineries are switching to the summer blend”. We’ve had to deal with that ever since this ethanol mandate. If you want to jump-start the economy, LEAVE THE GAS ALONE so that it can fall to a more reasonable level and everyone can have extra money in their pockets.

I don’t think it’s a coincidence that gas prices soared past $3/gallon just as the economy started to implode in 2008.

TMOverbeck on June 27, 2014 at 7:13 AM

Why doesn’t someone come up with a way to take our trash, which fills landfills DAILY, and is further composed of stuff we obviously do NOT want any longer, and process THAT to put in our fuel tanks? Win for the environment, win for the environmentalist whackos, AND we can increase the food supply here in country AND around the world to ease world hunger?

Newtie and the Beauty on June 26, 2014 at 9:02 PM

There’s been something in the works since 2006

ProudinNC on June 27, 2014 at 8:03 AM

Meanwhile…..in other news, the 50 year old mandate that requires the USA to present a military force in the middle east to protect the Saudi oil flow, if allocated correctly, cost the American consumer over 5.00 a gallon and that is when gas was 1.50 at the pump…. Nobody has yet to die for a gallon of ethanol, moonshine maybe but that was their choice.
****
How can something that costs, with corn under cost of production, ethanol reduces gas at the pump by over 1.50 per gallon be the source of higher gas prices….but the military mandate in the middle east for 50 yrs gets completely overlooked for decades?
****
Food costs due to ethanol—more b.s.—-talk to me when the USA stops wasting 30 percent plus of its food, it goes into the garbage, that percent is more than net use of corn for ethanol after DDG by product accounted for.

sbark on June 27, 2014 at 8:33 AM

Meanwhile…..in other news, the 50 year old mandate that requires the USA to present a military force in the middle east to protect the Saudi oil flow, if allocated correctly, cost the American consumer over 5.00 a gallon and that is when gas was 1.50 at the pump…. Nobody has yet to die for a gallon of ethanol, moonshine maybe but that was their choice.

Nice try, but total B.S. Having a military presence anywhere isn’t what affects the cost of fuel. What it costs is the effort to pull it out of the ground, the cost of transport, and the cost of refining and distribution.

The military is there to protect the drilling sites, and to say they add an addition $3.50 per gallon is totally bogus.

Turtle317 on June 27, 2014 at 9:03 AM

Why doesn’t someone come up with a way to take our trash, which fills landfills DAILY, and is further composed of stuff we obviously do NOT want any longer, and process THAT to put in our fuel tanks?

It’s called plasma gasification.

http://www.wired.com/2012/01/ff_trashblaster/

This article is from 2012. At that time there were supposedly a lot of companies pursuing this solution. I have not seen much news on this in 2014.

JohnnyL on June 27, 2014 at 9:21 AM

1. Ethanol has 80% the energy density as gasoline. IOW it takes 1.25 gallons of ethanol to equal the energy of 1 gallon of gasoline.

2. It takes It takes about 1.75 gallons of oil to manufacture 1 gallon of ethanol.

This means that to provide a gallon of ethanol it takes 2.18 gallons of oil. Just more leftist math that ethanol helps solve our energy problems. Ethanol exacerbates our energy problems and makes food more expensive.

jukin3 on June 27, 2014 at 11:47 AM

A little OT but I think Democrat Ed Markey’s complaint about the administration lifting somewhat the ban on oil exports by allowing export of “condensates” was ironic:

Senator Edward Markey, a Massachusetts Democrat, blasted the export approvals saying it puts America on a “slippery slope” to send more oil abroad when the Middle East is in disarray and tensions are high with Russia.

“Congress put this oil export ban in place. It should be Congress that decides when and how to change it, not through a private ruling by the Commerce Department without public debate,” he said.

Funy how executive changes to the ACA and EPA anti-carbon regs that bypass Congress are OK in the eyes of the progressive left but when it is something they do not like, they howl executive overreach.

KW64 on June 27, 2014 at 11:56 AM

Why doesn’t someone come up with a way to take our trash, which fills landfills DAILY, and is further composed of stuff we obviously do NOT want any longer, and process THAT to put in our fuel tanks?

Newtie and the Beauty on June 26, 2014 at 9:02 PM

This is the way we used to dispose of trash: we BURNED (new more politically correct word is “incineration”) it!! Then in the 70′s liberals decided that “fire is bad” without any actual evidence. As usual with liberal memes, they just wrote the phrase “fire bad” over and over and over again until they actually believed it.

Incineration, done properly, provides energy for heating and other uses, sterilizes waste matter, neutralizes most toxins, and reduces the volume of the trash by several orders of magnitude. Many municipalities used burning to dispose of trash for hundreds of years with few problems. Landfills (the liberal replacement) are a poor substitute: providing homes for vermin and continuing sources of air and water pollution. Landfills were made even more ineffective by liberal efforts to keep water (necessary for bio-degradation) out of the landfills instead of managing the degradation process intelligently.

Liberals cannot stand to see a problem actually solved.

landlines on June 27, 2014 at 1:05 PM