The Environmental Protection Agency's proposal for a new ethanol requirement is coming under fire a little more than a week before it must be announced.
The EPA is set to announce before Nov. 30 that 17.4 billion gallons of biofuel must be added to the nation's gasoline supply in 2016. The agency also will set retroactive standards for 2014 and 2015. The standard for 2014 would be 15.93 billion gallons of biofuel, which was the actual amount used. The standard for 2015 would be 16.3 billion gallons.
The Center for Regulatory Solutions, an anti-ethanol group, released two reports this week showing how the Renewable Fuel Standard has hurt California and Illinois. The group is doing a series of reports on how the standard affects various parts of the country.
According to the reports, Illinois residents lost about $4.9 billion between 2005-14 due to higher fuel costs, while Californians lost about $13.1 billion. The higher fuel costs are because ethanol has a lower energy output than gasoline, meaning residents have to fill up more often.
The group is running advertisements in Illinois and California asking residents to tell their members of Congress to work against the new ethanol rules. The reports indicate Illinois stands to lose $17 billion in higher fuel costs until 2024 if the new standards remain.
In California, the hit will be even bigger: $28.8 billion in costs from 2015-24, according to the report.
Karen Kerrigan, president of the Center for Regulatory Solutions and the Small Business and Entrepreneurship Council, said environmentalist lobbyists and activists such as California billionaire Tom Steyer are the reason the Renewable Fuel Standard still exists.
"The RFS hangs on because of the power of the ethanol lobby in national politics," she said. "It is stunning to think that a billionaire environmental activist like Tom Steyer would drop his misgivings about corn ethanol and throw the economy of his home state under the bus. But he's no different than many other political figures with national ambitions, including presidential candidates of both parties, who get ahead by siding with the ethanol lobby over consumers and small businesses."
The EPA released a document Friday showing it doesn't expect the new biofuel standards to have any monetary benefit.
In its Fall 2015 Statement of Regulatory Priorities, the agency estimates the Renewable Fuel Standard to have zero benefits. However, the new rule could cost between $118 million and $595 million, according to the document.
The new standards are expected to break the "blend wall," or the amount of biofuel — 10 percent — that car engines can handle without suffering any damage. The Renewable Fuel Standard requires a certain amount of biofuel to be added to the nation's gasoline supply, rather than having it make up a certain percentage. Because gasoline demand is dropping, the percentage of ethanol in gasoline is increasing.
Despite those attacks, the Renewable Fuel Standard got a strong endorsement from a powerful Northern Californian this week as well: House Minority Leader Nancy Pelosi.
In a letter sent to Brian Deese, senior adviser to President Obama, Pelosi and three other Democratic lawmakers made it clear that they want the Renewable Fuel Standard to remain strong, according to Reuters.
"We hope you will keep in mind the need to reduce carbon pollution, and not expand it in the transportation sector," the letter stated, according to Reuters.
Matt Dempsey, spokesman for Center for Regulatory Solutions, met Pelosi's letter with chagrin. He called it a "bizarre position for her to take."
"Just because she supported this thing a decade ago doesn't mean she has to support it now," he said. "It's almost as if she's completely oblivious to all the science and data that's come back over the past 10 years that shows ethanol's an environmental loser."
However, one study made public this week backed up Pelosi's assertion that the biofuel standards are helping reduce greenhouse gas emissions.
A report released Friday by the pro-ethanol consulting group Life Cycle Associates said the second incarnation of the Renewable Fuel Standard has led to "significant" reductions in greenhouse gas emissions.
According to the report, 354 million metric tons of carbon dioxide have been kept out of the atmosphere thanks to the biofuel rule.
The second Renewable Fuel Standard has exceeded original projections from 2010 due to better technology in corn ethanol production, higher than expected emissions from petroleum and the addition of other non-ethanol renewable duels, the report said.
"These emissions savings occur even though cellulosic biofuels have not met the RFS2 production targets," it said.