Posted March 25, 2014
Check out our new ads on the Renewable Fuel Standard (RFS) below – including this video that highlights in a humorous way the potential negative impacts for consumers from RFS mandates that force higher ethanol blends into the marketplace:
Unfunny would be seeing boaters left high and (not so) dry because their marine engine conked out, damaged by higher ethanol-blend fuel. Or stranded motorists, or home owners with outdoor equipment ruined by using fuel with more ethanol content than the mower or trimmer was designed to use. These are the real-world stakes in the current debate over the RFS and its ethanol mandates.
Another important part of the discussion is the diverting of food (and the acreage to produce it) toward making more ethanol. Here’s one of our new print ads:
The food for fuel dilemma hits consumers where they eat, impacting food costs, driving them up for retailers and restaurateurs alike – some of the impacts of which are detailed in this op-ed for the Louisville Courier-Journal by White Castle CEO Lisa Ingram:
When I look at the challenges our business faces, what worries me most are external factors like a federal policy that began with good intentions but, over time, has brought dire consequences. The Renewable Fuel Standard (RFS) is taking needed resources out of our business and hurting our customers because of its impact on food prices. … Like the waves from a rock thrown into a farm pond, the impact of rising corn demand and price ripples through the nation’s food economy. Corn prices affect baked goods, dairy products, meat, prepared food, beverages and other products. I know firsthand that since the implementation of the RFS, our beef prices have increased 47 percent and are just one of many food commodities causing costs to increase by approximately $15,000 per restaurant. Consequently, food costs have increased by more than $435,000 each year at our 29 Louisville restaurants. That is money that could be used to help pay for the opening of a new restaurant that employs dozens of people. The government mandate impacts our ability to grow and expand our business. It may not seem like much, but when one company in one city has those impacts, imagine what it means to an industry and to cities and towns throughout the country.
Bob Greco, API’s downstream group director, talked about the need for Congress to address the RFS and related issues during a lunch meeting with reporters last week. Highlights below.
On the need for congressional action:
“We need resolution. Should it be repealed? Yes. But we also realize that this needs to be addressed. … The blend wall is our biggest concern, and we need to make sure that to avoid these economic impacts anything that Congress does, at a minimum, has to address the 10 percent blend wall and the fact that we have an arbitrary increase above that under (the RFS).”
On a NERA Economic Consulting study warning that RFS ethanol mandates could lead to fuel rationing and supply shortages that could drive up gasoline costs 30 percent and the cost of diesel by 300 percent:
“The problem is, if you look at (the RFS) as written and the way Congress (wrote) the legislative language … it’s clearly in the realm of possibility, according to NERA, because of the nature of the mandate.”
On suggestions the RFS can be managed in a way that its ethanol mandates won’t impact vehicle warranties, as auto manufacturers have said:
“(One study) in effect it says there isn’t a compatibility issue with older vehicles with E15, assuming the warranty issues can be managed. Well, that’s the problem. If it could pass the warranties we wouldn’t be having this conversation. They assume away the elephant in the room. The reason E15 is a problem is that every single automaker has said we’re not going to extend warranty coverage.”
“It is one company, but it’s symptomatic of the problem that we’re facing with how EPA sets these mandates. We have said all along that … they ought to set the mandates for the advanced biofuels based on actual, demonstrated production. We have said pick three months, that’s a good time frame. So at least that way you can have some certainty that these plants are actually producing the fuel. EPA has yet to go that far. … The way to avoid (mandate problems) is don’t base it on expectations. Base the mandate on actual production.”
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.