The relentless saga of stupid that is the Renewable Fuel Standard rages on.
To review: Back in 2005, followed by an expansion of the law in 2007, Congress deemed that it would be a good idea if fuel refiners were required to gradually begin blending various biofuels into the nation’s gasoline supply, eventually amounting to a total 36 billion gallons of biofuels annually by the year 2022. It was and is painfully apparent that this so-called “Renewable” Fuel Standard is nothing more than the federal government’s cronyish love letter to the corn-turned-ethanol lobby, and it has all too predictably turned out that biofuels are not the environmentally friendly, affordable stabilizer we were once promised they would be — and they jack up food and gasoline prices and are harder on car engines than purer gasoline to boot.
Lawmakers assured the Little People that they obviously knew best at the time, and the esteemed bureaucrats at the EPA evidently continue to do so — but declining gasoline consumption in the United States combined the scheduled targeted increases in biofuels blending required by the RFS means that refiners are being driven up against what is referred to as the “blend wall.” Automakers will not warranty engines to use anything that goes past a 10 percent ethanol blend. Companies can purchase ethanol credits known as RINs if they don’t meet the RFS, but RIN prices have lately been spiking with companies’ increased demand for the credits (in turn passing on the heightened costs to consumers), and energy and automobile companies have recently been trying to get the EPA to back off on their clearly overly optimistic requirements.
The EPA’s response to this boondoggle can be summarized thusly: Shut. Up.
As part of an ongoing effort to enhance energy security and reduce carbon pollution, the U.S. Environmental Protection Agency (EPA) today finalized the 2013 percentage standards for four fuel categories that are part of the Renewable Fuel Standard (RFS) program established by Congress. Most of these fuels are produced by American farmers and growers domestically and help reduce the carbon pollution that contributes to climate change.
The final 2013 overall volumes and standards require 16.55 billion gallons of renewable fuels to be blended into the U.S. fuel supply (a 9.74 percent blend). This standard specifically requires:
-Biomass-based diesel (1.28 billion gallons; 1.13 percent)
-Advanced biofuels (2.75 billion gallons; 1.62 percent)
-Cellulosic biofuels (6.00 million gallons; 0.004 percent)
These standards reflect EPA’s updated production projections, which are informed by extensive engagement with industry and a thorough assessment of the biofuels market.
Except, remember that one time — last year — when your projections weren’t informed? Like, at all? And you tried to actually penalize companies for failing to comply with one aspect of the Standard for cellulosic biofuels that didn’t actually exist? Gee, that was fun. (I might also add that the “energy security” goals originally alluded to in the law have already been surpassed by innovations in the energy industry — cough, fracking — and that plenty of research suggests that ethanol is actually worsening carbon pollution on net balance. But I digress.)
The EPA also promised that they would be employing “flexibilities” in the law to reduce the amount of biofuels required in next year’s rule, when the industry estimates they’ll run up against the blend wall — basically putting off really addressing the underlying problem until next year. Oddly, the industry is not assured by this promise.
The petroleum industry formally asked the Obama administration on Tuesday to lower the amount of corn-based ethanol refiners must blend into transportation fuel in 2014.
Failing to adjust the Renewable Fuel Standard’s blending targets could result in “severe harm to the U.S. economy” resulting from higher gasoline prices, the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM) said in comments regarding a request for a waiver from the rule.
The groups’ claim of economic damage relied on an API-commissioned NERA Economic Consulting study that said leaving the fuel mandate intact could raise diesel costs 300 percent and gasoline costs 30 percent in 2015.
There are several ideas circulating around Congress to reduce or eliminate the Renewable Fuel Standard, but I don’t know how hopeful I am about them. Even Republicans like Sen. Chuck Grassley (oof) seem to be able to invent reasons why their normal free-market principles don’t apply and that subsidies are somehow a good idea when applied to the ethanol industry. Those Iowa corn-farmer associations will not be denied, you know.