Energy Tomorrow Blog
Posted August 1, 2017
Posted June 10, 2016
We often hear proponents of the federal Renewable Fuel Standard (RFS) argue that mandating increasing use of ethanol in the nation’s fuel supply is about consumer choice. This view is reflected in some of the news coverage of this week’s RFS public hearing in Kansas City.
Yet, when you look at the marketplace and the fuels consumers actually want, the RFS represents restricting choice, not expanding it.
Posted March 25, 2016
To understand why the Renewable Fuel Standard (RFS) must be repealed or significantly reformed, start at the “blend wall.”
The ethanol blend wall is where – because of the RFS’ mandates – more ethanol must be blended into the nation’s fuel supply than can be absorbed as E10 gasoline – gasoline containing up to 10 percent ethanol, which is standard across the country. Put another way, when ethanol makes up more than 10 percent of the total U.S. fuel mix, you’ve breached the blend wall.
At that point refiners have few options. They can produce E15 and E85, fuels containing higher volumes of ethanol, or they can comply with the RFS by reducing the amount of fuel supplied to the domestic market. Neither is a good choice for American consumers.
Posted November 30, 2015
In finalizing ethanol volume requirements under the Renewable Fuel Standard (RFS), the EPA is basically testing the limits of the ethanol “blend wall” and the potential impacts of breaching it. Unfortunately, the guinea pigs in the experiment are U.S. consumers – their wallets, their vehicles.
That’s what we draw from EPA’s requirements for levels of corn ethanol and other renewable fuels that must be blended into the U.S. fuel supply. EPA officially set requirements for 2014 (two years late), 2015 (a year late) and 2016. Requirements for 2016 are the most significant – 18.11 billion gallons, which is lower than what Congress originally required when it created the RFS, but higher than what EPA proposed in May (17.4 billion gallons).
Posted October 28, 2015
Next month EPA is scheduled to finalize 2014, 2015 and 2016 ethanol-use requirements under the Renewable Fuel Standard (RFS) – and where EPA sets the volume standards could have big impacts on consumers and our economy.
We’ve been talking about flaws in the RFS for some time, and the chorus of voices has grown because requiring increasing volumes of ethanol in the nation’s fuel supply could affect vehicle owners, consumers paying for fuel and food, the environment and the global food supply.
Posted September 9, 2015
NERA Economic Consulting has a new study warning of potentially dire economic impacts from continued implementation of the Renewable Fuel Standard (RFS), as written into law by Congress.
NERA set up its study that way for good reasons: Despite abundant evidence that RFS mandates for ever-increasing ethanol use in the nation’s fuel supply are detached from reality, and although it’s pretty clear EPA has mismanaged the RFS to the detriment of those obligated to meet its mandates – the ethanol industry insists that the program continue as statutorily set out in 2007.
That, according to NERA, is a roadmap to potential economic calamity and consumer pain.
Posted September 2, 2015
Finalized federal requirements for ethanol use in 2014, 2015 and 2016 under the Renewable Fuel Standard (RFS) are scheduled to come out later this year. As EPA completes work on them, the interests of American consumers should be put ahead of special ethanol interests. At the same time, policymakers should recognize that the RFS is broken, out of date and should be repealed.
Ethanol supporters argue that RFS mandates can be met by pushing out more E15 and E85 fuel, which contain higher levels of ethanol than E10 gasoline that’s standard across the country. But this would disregard potential risks to consumers and small businesses. A number of organizations argue that point in official comments to EPA on the RFS, which can be found here.
Posted July 21, 2015
With another congressional hearing on the Renewable Fuel Standard (RFS) scheduled this week, a couple of glimpses behind the curtain at EPA help explain why the RFS is dysfunctional and needs to be repealed or dramatically overhauled.
Glimpse No. 1 comes from a U.S. Senate subcommittee hearing last month, chaired by Sen. James Lankford of Oklahoma. The witness was EPA’s Janet McCabe, acting assistant administrator for the office of air and radiation. Tune in at about the 1-hour, 24-minute mark of the archived video to see Lankford’s discussion with McCabe about how EPA sets annual ethanol use requirements under the RFS.
The overriding issue is the ethanol “blend wall” – the point where the RFS requires blending more ethanol into the national fuel supply than can be used in E10 gasoline. At that point some think that higher ethanol-blend fuels like E15 and E85 will help meet RFS ethanol mandates. But E15 can cause damage to engines and fuel systems in vehicles that weren’t designed to use it – as well as outdoor power equipment, boats and motorcycles. And E85 is less energy-dense than standard gasoline – getting fewer miles to the gallon. It represents a tiny fraction of overall gasoline demand, a strong signal from consumers.
Posted June 26, 2015
API Downstream Group Director Bob Greco traveled this week to EPA’s field hearing on the Renewable Fuel Standard (RFS) in Kansas City, to detail concerns over the flawed program, with its market-distorting mandates for ever-increasing use of ethanol in the national fuel supply. His remarks, as prepared for delivery:
The Ethanol Blend Wall
Our members’ primary RFS concern is the ethanol blend wall. Serious vehicle and retail infrastructure compatibility issues exist with gasoline containing more than 10 percent ethanol. We are encouraged that EPA has proposed to address this reality.
Gasoline demand increases projected in 2007 did not materialize, and Congress granted EPA the authority to balance its aspirational goals with reality. API supports EPA’s use of its explicit RFS waiver authorities in 2014, ‘15, ‘16, and beyond to avoid negative impacts on America’s fuel supply and to prevent harm to American consumers.
Posted June 17, 2015
Quick rewind to 2007, when Congress enacted the Renewable Fuel Standard (RFS): The U.S. faced energy challenges – declining domestic production leading to greater dependence on imports and ever-increasing consumer costs. The RFS was conceived as a way to spur production of advanced biofuels that would help on imports and costs.
Today the energy landscape has completely changed. Thanks to surging domestic production from shale and other tight-rock formations with advanced hydraulic fracturing and horizontal drilling, the United States is No. 1 in the world in the production of petroleum and natural gas hydrocarbons. Our imports are falling, and consumers have enjoyed lower prices at the pump.
Yet, the RFS remains – with its mandates for increasing use of ethanol in the fuel supply, seemingly impervious to the changed energy landscape, even as increased domestic oil production has checked off RFS objectives one by one. Even EPA’s latest proposal for ethanol use, while acknowledging that the RFS has serious flaws, continues to try to manage the behavior of markets and consumers, ironically leaving both on the sidelines.
That was the message in a telephone briefing with reporters hosted by API President and CEO Jack Gerard. Joining the call were Wayne Allard of the American Motorcyclist Association (AMA), Heather White of the Environmental Working Group (EWG) and Rob Green of the National Council of Chain Restaurants (NCCR).