The People of America's Oil and Natural Gas Indusry

Consumers Need More Protection From RFS

Mark Green

Mark Green
Posted November 30, 2015

In finalizing ethanol volume requirements under the Renewable Fuel Standard (RFS), the EPA is basically testing the limits of the ethanol “blend wall” and the potential impacts of breaching it. Unfortunately, the guinea pigs in the experiment are U.S. consumers – their wallets, their vehicles.

That’s what we draw from EPA’s requirements for levels of corn ethanol and other renewable fuels that must be blended into the U.S. fuel supply. EPA officially set requirements for 2014 (two years late), 2015 (a year late) and 2016. Requirements for 2016 are the most significant – 18.11 billion gallons, which is lower than what Congress originally required when it created the RFS, but higher than what EPA proposed in May (17.4 billion gallons). EPA’s Janet McCabe:

“With today’s final rule, and as Congress intended, EPA is establishing volumes that go beyond historic levels and grow the amount of biofuel in the market over time. Our standards provide for ambitious, achievable growth.”

API Downstream Group Director Bob Greco told reporters EPA is right to use its waiver authority to set the requirements below the original congressional mandate, calling it an acknowledgment of the “market limitations of the ethanol blend wall” –the amount of ethanol that can be safely blended into the fuel supply as E10 gasoline that’s standard across the country. Greco:

“[T]oday’s RFS announcement still falls short. EPA must lower biofuel mandates further to ensure that Americans have access to fuels they want and can safely use in their vehicles. The agency must do more to protect consumers.  EPA’s final rule still relies on unrealistic increases in the sales of higher ethanol blends despite the fact that most cars cannot use them. Motorists have largely rejected these fuels. We’re also concerned with the ramifications these mandates could have on fuel costs and our economy.”

ethanol

Greco said API asked EPA to set the volume requirements no higher than 9.7 percent of gasoline demand to help avoid the blend wall and to protect strong consumer demand for ethanol-free fuel. ewgHe pointed to findings that corn ethanol, which plays the largest role in meeting RFS mandates, emits more greenhouse gases than gasoline, and he said it is “confusing” for the Obama administration to push corn ethanol while it seeks to lower global greenhouse gas emissions at the Paris climate summit. He said while the White House recently assigned the environmental benefits of the RFS at zero, yet its economic costs could be as high as $595 million annually. Greco:

“[T]he RFS was not included in the U.S. plan to reduce carbon emissions, which the Obama administration submitted to the UN in March.  Why are they pursuing an environmental program that brings no environmental benefits but comes with enormous costs to our economy?”

Ultimately, EPA’s testing of the marketplace through RFS mandates should be rejected. Greco said Congress should repeal the program or significantly reform it.

Consumers need more protection from the RFS. Greco:

infographic“Consumers have the right to choose the fuels that they want without putting their engines at risk. EPA is trying to push fuels such as E85 and E15 into the market despite the very strong resistance to the growth of those fuels. E15 in particular has been shown to cause engine damage in many vehicles and is not warranted by the auto manufacturers if the car wasn’t designed for it. Regarding E85, only about 6 percent of the vehicles on the road can use it and the customers have largely rejected that fuel, primarily because of cost, primarily because of the fuel economy penalty of that fuel. EPA is pushing fuels that the consumer doesn’t want.”

More Greco:

“The consumer is the loser in this because of the potential impact on fuel choice and in forcing fuels into the market the consumer doesn’t want or that could damage their engines. That’s the ultimate victim in this, the U.S. consumer.”


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.