GAO Report – Another Reason to Sunset the RFS

Jessica Lutz
Posted June 11, 2019

We’ve warned before (see here, here and here) that the broken Renewable Fuel Standard (RFS) and its mandates for ever-increasing ethanol use put consumers at risk. And that the administration’s recent decision to allow summer sales of E15 fuel – a blend containing 50 percent more ethanol than the E10 gasoline that’s widespread across the country – is an ineffective approach to addressing concerns with the RFS that will only serve to make things worse. Now, we can add another report to the long list of evidence that the RFS needs to be sunset – this time coming from the non-partisan U.S. Government Accountability Office (GAO).

The GAO recently reviewed the effects of the RFS and found that requiring the use of corn-based ethanol and biodiesel in gasoline supplies hasn’t lowered pump prices or significantly reduced greenhouse gas emissions – two of the main goals of the flawed RFS program. In fact, the review finds that gas prices outside of the corn-rich Midwest likely increased because of the program. To make matters worse, the review also found that there has been little, if any, reduction in greenhouse gas emissions – a main selling point used by proponents to justify the program. From the report summary:

“According to the experts and GAO's prior work, the effect has likely been limited for reasons including: (1) the reliance of the RFS to date on conventional corn-starch ethanol, which has a smaller potential to reduce greenhouse gas emissions compared with advanced biofuels, and (2) that most corn-starch ethanol has been produced in plants exempt from emissions reduction requirements, likely limiting reductions early on when plants were less efficient than they are today.

“Further, the RFS is unlikely to meet the greenhouse gas emissions reduction goals envisioned for the program through 2022. Specifically, GAO reported in November 2016 that advanced biofuels, which achieve greater greenhouse gas reductions than conventional corn-starch ethanol, have been uneconomical to produce at the volumes required by the RFS statute so the Environmental Protection Agency (EPA) has waived most of these requirements.”

This isn’t a new discussion. We’ve known for years that the RFS is deeply flawed, but let’s take a moment to remember a few of the reasons why pushing more high ethanol-volume fuel into the nation’s fuel supply could harm consumers:

• Without corresponding reductions of mandated biofuel volumes, more E15 could be forced into the market, increasing the risk of consumer misfuelling.
• About 70 percent of the current U.S. fleet of vehicles wasn’t built to use E15.
• The fuel also isn’t compatible with motorcycles, boats, lawn equipment, classic cars and ATVs.
• A number of automakers have said that using E15 could potentially void car warranties.
• Some automakers have produced model-year 2018 cars and trucks that aren’t designed to use E15, including BMW, Mazda, Mercedes, Mitsubishi, Subaru and Volvo.

And now, we know that the program has ultimately increased the cost for consumers at the pump while failing to produce reductions in emissions.

Thanks to the domestic energy revolution, the United States has been transformed from a nation of energy scarcity and dependence into one of abundance and increasing energy security. We have become the world leader in natural gas and oil production, and the world leader in reducing carbon dioxide emissions, with U.S. carbon emissions having plunged to their lowest levels in a generation. Basically, the RFS is obsolete, displaced by our own, technology-based natural gas and oil resurgence. And the government’s own reports show just how broken the RFS is.

Instead of another flawed “fix” for the RFS, it’s time the administration put consumers first. It’s time to sunset the RFS.