The Chorus of Concern on RFS Impacts
Posted October 9, 2013
A tactic used by ethanol backers trying to defend the relatively defenseless Renewable Fuel Standard (RFS) is attempting to frame the RFS debate as one between America’s oil and natural gas companies and renewable energy.
That’s faulty for a couple of important reasons. First, we’re Big Ethanol’s biggest customers, buying billions of gallons a year, as a useful additive in E10 gasoline. Second, our companies are for renewables, not against them, investing $81 billion in renewables and carbon-reduction efforts to reduce greenhouse gas emissions between 2000 and 2012 – nearly as much as all other U.S. industries ($91 billion) and more than the federal government ($80 billion).
Here’s another: Ethanol’s “us vs. them” argument actually is an “us vs. just about everybody else” argument, with interests including automakers, consumer safety groups like AAA, grocery manufacturers, environmental non-profits and anti-hunger groups objecting to RFS mandates for ever-increasing use of ethanol.
Some object because of impacts on food costs. Others object because higher-ethanol content E15 fuel is getting into the fuel supply, potentially harming vehicle engines and engines in outdoor equipment, boats and snowmobiles. This was brought out this week at a summit on biofuels policy held by the National Journal, which API President and CEO Jack Gerard opened this way:
“From our vantage point the Renewable Fuel Standard, while well-intended, a policy put in place, it’s a very different world today. We look at this past week where it’s just been announced that sometime this year the United States will now become the world’s No. 1 oil and natural gas producer. We believe that brings into question the foundation of the Renewable Fuel Standard and what that policy should be as we look to the future.”
A sampling of sentiments expressed by other speakers:
Damon Wells, vice president of government affairs, National Turkey Federation:
“Too often they’ve tried to say this this was a petroleum vs. ethanol fight. I take great exception to that. I think those in the animal agriculture industry take great exception to that because all of the benefits that have come from this Renewable Fuel Standard have transferred off the backs of small farmers all across this country that are feeding livestock and poultry and ultimately it’s a transfer of cost from one agricultural sector to another.”
Wells said his group and others in animal agriculture began raising alarms about impacts from the RFS when it was created in 2005. RFS mandates create demand for corn, putting upward pressure on feed prices, he said. The resulting economic ripple affects “real jobs, real people” in his industry. Wells:
“Ultimately, Congress has to fix this problem. EPA can nibble around the edges, but the reality is that Congress must fix the mess they started back in 2005.”
Rob Green, executive director of the National Council of Chain Restaurants, said a study conducted for his organization found that the RFS would result in $3.2 billion a year in increased commodity costs, which works out to about $18,000 a year for a typical small-business chain restaurant.
Kris Kiser, president and CEO, Outdoor Power Equipment Institute:
“Our small-engine industry and products … is sort of where the RFS meets reality. What’s happened is that gasoline consumption is falling … and you’re having to find a home for ethanol. We’re not for or against ethanol. We’re consumer products companies. We simply want our products to perform reliably and safely with the user, whether it’s an auto user or a marine user, a small-equipment user, snowmobile user. The challenge is you’re introducing fuel to the marketplace for which all of this stuff is not designed or warranted to run on. … This is what happens: You have product failure. Failure can mean economic failure or it can mean safety failure. … There’s a half-billion engine products in the marketplace today not built or warranted to run on E15.”
Again, concern about the RFS and its ethanol mandates is broadly based. Kiser:
“It’s a coalition of folks you couldn’t get together without a subpoena. You’ve got environmentalists and industry folks and food folks and NGOs … there’s this huge, diverse group of folks, for different reasons, on the same balance beam needing reform or changing the RFS.”
Wells is right. Congress should listen to the virtual chorus calling for action on the RFS. As U.S. Rep. Peter Welch said earlier in the event program, facts and logic argue for the RFS’ repeal. So do lots of voices. Gerard:
“We believe that good, sound public policy is a result of a robust debate. … As we reflect back on energy policy from our standpoint it should not be a partisan issue. It’s something that impacts us all … therefore we should look beyond partisanship and focus on what’s in the best interests of the nation as a whole.”
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.
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