In the final polls, Ted Cruz was slated to place second in Iowa. Considering he loudly criticized the Renewable Fuel Standard — the Washington boondoggle that turns corn into ethanol gold for Iowa farmers — in the days before the Caucus, Cruz’s resounding victory was particularly surprising.
You know a law is crazy when its biggest beneficiaries vote for someone who wants to end it.
Shockingly, the RFS is about to do even more damage. The Environmental Protection Agency recently mandated that even more ethanol — and other renewable fuels — be blended into gasoline in 2016. That’s a big mistake: The RFS is bad for the environment and bad for the economy.
Congress created the RFS in 2005 and bumped it up in 2007. This latest jump in the standard is actually higher than what the EPA initially proposed in June, and requires over 18 billion gallons of biofuels be blended into the fuel supply for 2016.
Since Congress created the RFS mandates, the amount of gas used by Americans has been declining steadily, even as the quantity of ethanol required to be blended into the fuel supply has increased. The result is that Americans have been getting gas that is increasingly diluted by biofuels, which generate much less energy per gallon than the petroleum product.
The dual purpose of mandating the addition of ethanol to gasoline in the first place was to decrease our dependence on foreign oil sources and do less environmental damage. But since the RFS was created in 2005, the United States has overtaken both Saudi Arabia and Russia to become the world’s largest oil and natural gas producer.
In other words, we’re less dependent on foreign energy than ever, and the RFS has had next to nothing to do with it.
Scientists have also stepped up to question the supposed environmental benefits of ethanol. In 2014, the United Nations Intergovernmental Panel on Climate Change released a report acknowledging “biofuels indirect emissions — including from land use change — can lead to greater total emissions than when using petroleum products.” The International Institute for Sustainable Development has concluded that after factoring in the energy demands from all the aspects of crop cultivation, there are no net climate change and environmental benefits.
These non-existent benefits come at considerable cost to American consumers. Each gallon of biofuel produced gets its own 38 digit code — known as a Renewable Identification Number — that allows it to be tracked through the supply chain and bought and sold in a secondary market. The EPA ensures compliance with renewable fuel mandates by tracking how many RINs refineries purchase in relation to their petroleum output.
But this secondary market has been anything but stable. In the past few years, RINs have fluctuated from as little as one cent a gallon to over a dollar because of a draught-caused corn shortage. Naturally, these added costs are passed on to the gas pump.
While we’re currently enjoying record low gas prices, that’s no thanks to the RFS. It has artificially created price instability in the fuel market and amounts to a massive hidden tax at the pump.
The RFS is also picking Americans’ pockets at the grocery store. The RFS has expanded the market for corn beyond all reason — 40 percent of all corn grown in America is used for ethanol. As a result, more farmers are growing corn instead of other important foodstuffs. According to report by PricewaterhouseCoopers, the RFS has increased costs for chain restaurants by as much as $3.2 billion every year — likewise costs that get passed on to consumers.
Outside the United States, renewable fuel mandates are increasing hunger in poor countries such as Guatemala, where corn is a staple food. The IPCC has also warned that “increasing bioenergy crop cultivation poses risks to ecosystems and biodiversity.”
The bottom line is that every single reason underlying the establishment of the RFS has been proven wrong or overtaken by current events. The RFS contributes a negligible amount to energy independence, does nothing for the environment, and is harmful to sustainable agriculture.
The RFS has always been more about politics than practical concerns. Even Iowans recognize that it’s time to end it.
Michael James Barton is the Energy Advisor at ARTIS Research and speaks around the country on energy and energy security matters. He previously served as the deputy director of Middle East policy at the Pentagon. Disclosure: Mr. Barton supports Ted Cruz’s campaign. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
