Energy Tomorrow Blog
Posted June 27, 2016
Two more results from the new Harris Poll on what Americans are thinking about key energy issues.
First, 77 percent of registered voters say they’re concerned about government requirements that would increase the amount of ethanol in gasoline. Second, 73 percent agree that federal government regulations could contribute to increased costs for gasoline to consumers.
Both results basically point fingers at the federal Renewable Fuel Standard (RFS) – which indeed is Washington pushing for more ethanol in gasoline, which experts and studies warn could impact consumers at the gasoline pump and at the repair shop.
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 May 27, 2016
When you head out for your Memorial Day drive, consider the current price of gasoline – the U.S. average retail price of $2.30 a gallon, which the U.S. Energy Information Administration (EIA) says is 47 cents lower than at the same time last year and the lowest average price just before a Memorial Day weekend since 2009.
Now, let’s all thank the U.S. energy revolution, which is playing a big role in consumer benefits, like those seen at the pump. EIA notes that lower gasoline prices reflect lower crude oil prices. And the global crude market wouldn’t be where it is without higher U.S. crude production.
Posted May 18, 2016
One unsettling aspect of the federal Renewable Fuel Standard (RFS) is that for some time it has appeared – from public statements anyway – that EPA considers the program an ongoing experiment, testing the ability of government policy to change or modify the behavior of free markets and the fueling choices of individual consumers, with consumers as the guinea pigs.
The results were logged in long ago: Flaws in the RFS and EPA’s management of the program mark it for repeal or significant reform. RFS mandates for increasing ethanol use in the nation’s fuel supply threaten breaching the ethanol “blend wall,” risking impacts to the broader economy and consumers’ wallets.
Just as unfortunate is EPA’s apparent lack of concern for U.S. consumers –reflected in the agency’s proposals for 2017 volume levels, which will test the blend wall, the point where required use of ethanol in the fuel supply exceeds the safe level of 10 percent.
Posted April 25, 2016
API’s Vote4Energy event earlier this month unveiled a number of energy policy recommendations for the Democratic and Republican platform-writing committees. Let’s focus on one – a call for the repeal or significant reform of the flawed federal Renewable Fuel Standard (RFS).
We’ve posted on a number of issues with the RFS, which range from the negative economic impacts that could result from breaching the “blend wall” to possible risks to vehiclesfrom using higher ethanol-blend fuel E15, to the program’s failure to establish a viable domestic cellulosic biofuels industry – one of the main reasons the RFS was created in the first place. Americans are clued into the RFS’ shortcomings and are concerned – reflected in recent polling. API’s Frank Macchiarola, group director for downstream and industry operations:
“Since the inception of the ethanol mandate a decade ago, the United States has undergone an energy transformation from a nation of energy dependence and scarcity to one of energy security and abundance. It is well past time to reform outdated energy policies to reflect the energy realities of today and tomorrow. … Simply stated, this is bad public policy that creates a potential harm to the American consumer. And, it must be fixed. The American people agree.”
Posted April 6, 2016
We can sum up new polling on Americans’ perceptions of the federal Renewable Fuel Standard (RFS) and its potential impact on their lives in a word: concerned.
Make that very concerned – about potential damage to their vehicles, about the broad economic effects of breaching the ethanol “blend wall” and about diverting corn away from the global food supply to manufacture ethanol.
Posted April 4, 2016
When Congress created the Renewable Fuel Standard (RFS) more than a decade ago, lawmakers hoped the federal fuels program would spur development of a domestic biofuels industry that would help reduce oil imports with millions and millions of gallons of home-grown ethanol – with a particular focus on increasing volumes of cellulosic biofuel made from corn stover, wood chips, miscanthus or biogas. By 2022, it was expected that 16 billion gallons of cellulosic biofuel would be produced, but a couple of other things happened instead.
First, the U.S. energy revolution happened. Our crude oil imports fell mostly because of surging domestic oil production, not the RFS. Through safe hydraulic fracturing and horizontal drilling, American output grew from less than 6 million barrels per day to more than 9 million barrels per day – the growth in domestic production more than accounting for the reduction in net imports.
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 March 3, 2016
In testimony before the committee, Lucian Pugliaresi, president of the Energy Policy Research Foundation, Inc. (EPRINC), shared EPRINC’s conclusion that continuing to administer the RFS as written “would increase gasoline prices from approximately 30 cents to 50 cents a gallon” and cautioned Congress to address “the risk to economic recovery” this poses.
Posted February 23, 2016
When Congress and the president acted late last year to end the decades-old ban on domestic crude oil exports, Washington showed it could generate the consensus to update energy policy so it matches America’s new energy reality, a reality of abundance created by surging domestic oil production. The same kind of change is needed on the broken Renewable Fuel Standard (RFS).
We saw how the crude oil exports ban buckled under the weight of economic research and reason, both of which argued that allowing U.S. oil to reach global markets would be good for America and American consumers. In the case of the RFS, there’s a compelling opportunity to protect U.S. consumers from potential harm wrought by a bad public policy.
Step No. 1 is a scheduled hearing this week on the RFS by the Senate Environment and Public Works Committee. Witnesses include EPA and U.S. Energy Information Administration officials. Frank Macchiarola, API group director of downstream and industry operations, discussed the stakes in the RFS debate during a conference call with reporters. The main point: The RFS is mismatched for the new era of U.S. energy abundance.