Fix the Failed Biofuel Policy

Op-EdFix the Failed Biofuel PolicyThere's now even more evidence that the Renewable Fuel Standard is a failure.

Energy & Natural Resources,  | Quick Take
Dec 7, 2016  | By  | 4 min read | Print Article

Originally published on October 27, 2017 in U.S. News & World Report

November was a roller coaster ride for our nation’s biofuels mandate. On Nov. 28, two new reports by the Government Accountability Office – Congress’ non-partisan watchdog agency – were released echoing what my organization has said for years: the Renewable Fuel Standard is a failure. While the standard was intended to help achieve U.S. energy independence and reduce greenhouse gas emissions, the GAO found the opposite: “It is unlikely that the goals of the Renewable Fuel Standard will be met … because there is limited production of advanced biofuels to be blended into domestic transportation fuels.”

The majority of Renewable Fuel Standard gallons consumed to date have instead been corn-starch ethanol, a biofuel that may actually increase emissions. Meanwhile, production of cellulosic biofuels, required to reduce emissions by at least 60 percent, has fallen at least 95 percent short of Congressional mandates.

Rewind to the Wednesday before Thanksgiving, when the Environmental Protection Agency handed the corn ethanol lobby an early Christmas present: a 15 billion gallon blending requirement in 2017, an increase of 200 million gallons from the agency’s proposal this summer, but on par with the mandate Congress set in 2007. If the EPA would have heeded its own advice (or the GAO’s, or that of the National Academy of Sciences or the Congressional Budget Office), it would have reversed course.

The EPA’s own analysis this summer showed the Renewable Fuel Standard resulted in $1.6-$3.5 billion in higher fuel costs from 2014 to now. Not only does the higher corn ethanol volume ignore the limited amount of ethanol that can be blended into the current gasoline market (known as the “blend wall”), it also ignores a laundry list of higher costs for consumers and taxpayers brought about by the industry’s rapid expansion.

The program has a litany of costs, including those of higher fuel and food prices, worse public health, water pollution and more. The icing on the cake is nearly four decades of tens of billions in federal subsidies for everything from biofuels research and development to subsidies for special ethanol pumps.

The second report by the Congressional watchdog released on Monday tallied the cost of just advanced biofuels research and development from fiscal years 2013-15, estimating it cost taxpayers $1.1 billion. This does not even account for the billions in corn and soybean subsidies in the farm bill or other biofuels subsidies spread across at least five federal agencies. Special ethanol blender pumps also cost more since old pumps must be replaced to dispense ethanol, which is more corrosive than gasoline. At Taxpayers for Common Sense, we awarded Agriculture Secretary Vilsack a Golden Fleece in 2015 for his efforts to continue to bolster the mature corn ethanol industry despite Congressional, consumer and taxpayer opposition.

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The Renewable Fuel Standard has failed as a means to reduce greenhouse gas emissions and has cost taxpayers dearly along the way. Incidentally, the GAO found a more efficient option for reducing greenhouse gas emissions without unintended impacts would be a carbon tax, something my organization has supported for years. It is time for the new Congress and the next administration to listen to the growing body of evidence and fix our failed biofuels policies.