Bob Greco's remarks at press conference call on RFS
Press Conference Call on RFS
Wednesday, March 11, 2015
Bob Greco, API downstream group director
Scott Faber, EWG vice president of government affairs
Kelly Stone, ActionAid USA biofuels policy analyst
Opening remarks, as prepared for delivery:
Good morning, and thanks to everyone for joining our call today.
A chorus of concerned groups -- from consumer groups to environmental groups to anti-hunger groups to industry groups – are calling for repeal or reform of the nation’s ethanol mandates under the Renewable Fuel Standard.
API remains seriously concerned that increasing ethanol mandates under the RFS stand to harm consumers and our economy.
The law started off with the best of intentions, but the program is now unworkable.
We faced a far different energy outlook back in 2007, when Congress enacted the RFS.
Back then, projections showed the U.S. would consume more fuel each year. And we thought our domestic production would decline.
But in reality, gasoline consumption is down 12 percent from what the government projected it would be in 2015. Energy Information Administration gasoline demand projections for 2022 are now down almost 30 percent from projections back in 2007, and the EIA predicts almost no demand growth for gasoline in the U.S. for the foreseeable future.
We’re also in the midst of an energy renaissance that has made the United States more secure as a nation.
But despite these drastic changes in our global energy position, the RFS remains stuck in the past.
The RFS requires us to squeeze more ethanol into a smaller amount of gasoline.
This year we could hit what is called the ethanol blend wall, where the RFS would force more than 10 percent ethanol into each gallon of gas.
This is concerning because most cars on the road today cannot tolerate these higher ethanol blends.
Testing by the oil and auto industries shows these blends could significantly damage millions of cars on the road.
Engines and fuel systems just were not designed for fuel with higher than 10 percent ethanol.
And, automakers have said they will not honor warranties when consumers use these higher blends.
Even the Congressional Budget Office weighed in on the debate. It determined that current ethanol mandates could raise the cost of fuel for consumers and damage our economy.
API supports bipartisan proposals in both the House and Senate to repeal or significantly reform the RFS to protect consumers and our economy.
And now I’d like to turn the call over to Scott Faber at the Environmental Working Group to discuss some of his group’s concerns.
Thank you Scott and thank you everyone for joining us today.
ActionAid recently released a new report studying the global impact of government biofuel mandates, such as the Renewable Fuel Standard.
Our report found that government mandates are the key driver in the growth of biofuel demand.
Over the next decade, mandates will drive a 43% increase in global biofuel demand. The United States and the Renewable Fuel Standard will be responsible for half of that demand growth.
This level of growth will have serious implications for hunger and land rights around the world, compounding the problems we are already seeing from biofuel production.
ActionAid has heard from communities that we work with in countries ranging from Tanzania, Guatemala, to Cambodia, that the expansion of biofuels is a serious concern for them.
These mandates contribute to unstable food prices, making it harder for poor people around the world to feed their families.
In the developing world, poor people spend the 60-80% of their income on food, so even small changes can make it very difficult for them to afford enough to eat.
These mandates also lead to poor farmers being kicked off their land due to increased competition for land and resources. This land is these farmers’ livelihoods and their means of growing food for their families.
Congress had good intentions when it created the Renewable Fuel Standard, but the unintended costs are too high and it is time for reform. We shouldn’t be fueling hunger when we are fueling our cars.