Posted on 10/31/2019 5:07:19 AM PDT by Kaslin
It's time for the annual Congressional fight over the Renewable Fuel Standard, or RFS. In one corner sit corn farmers and their representatives, who fight tenaciously not just to preserve the RFS but to expand it. In the other sits, well, just about everyone else. Whether you are a refiner, a consumer, an environmentalist, a free market economist or just someone who cares about good government, there is ample reason to oppose the ethanol mandate.
Since 2005, the federal government has required that refineries blend increasing amounts of ethanol (grain alcohol) with gasoline. There are requirements for cellulosic, biodiesel and advanced biofuels, with the rest of the mandate typically being met by corn ethanol since it is the cheapest.
The stated goals of the RFS were to reduce reliance on foreign energy and to move toward cleaner fuel sources. It falls short on both fronts.
Worries about dependence on foreign oil were mitigated by the U.S. shale oil and fracking boom, exemplifying the sort of innovation and market changes that central planners inevitably fail to account for. The RFS is worse than unnecessary when it comes to reducing foreign energy consumption, which is itself a goal of dubious benefit. The RFS works against this objective because meeting the excessive biodiesel mandate has actually required significant imports.
Compounding bad policy with worse, the Commerce Department keeps imposing tariffs on countries selling the cheapest biofuels available to meet the mandate.
The RFS also fails to deliver on the environmental front. A recent Cato Institute report by Arthur Wardle highlights the impact of expanded land use for corn -- with the increased application of nitrogen fertilizer leading to runoff that contributes to the hypoxic dead zone in the Gulf of Mexico and kills sea life -- as evidence that "the research on the Renewable Fuels Standard is clear that it degrades the environment." The Cato report also cites a meta-analysis, published in the American Journal of Agricultural Economics, of studies that modeled the life cycle greenhouse gas emission of ethanol versus gasoline and found a meager reduction of only 0.23%.
Sadly, Congress is not currently preparing to revisit the big picture. The current battle is primarily over the use of waivers authorized by the law to mitigate the negative impact of the mandate on small refiners that are unable to blend their own ethanol or afford offsets. The House just convened a hearing on the topic, titled "Protecting the RFS: The Trump Administration's Abuse of Secret Waivers."
The Obama administration underutilized the hardship waivers, and some refiners consequently went out of business. The corn ethanol lobby is now unhappy with the number of waivers the Environmental Protection Agency has granted in recent years, even though they are a big reason why the mandate has not done much more harm. They also want higher volumes to be required on remaining refiners to make up for the hardship exemptions. Recommended REPORT: 'Whistleblower' Who Complained About Trump's Call to Ukrainian President Zelensky Revealed Bronson Stocking
The statute provides no authority to reallocate obligations to other companies, and doing so would move policy in the wrong direction. As volume obligations increase, it's vitally important that the waivers be preserved or else the industry would be hollowed out, leaving only the largest refineries. The waivers may not prove to be enough, so lawmakers could also consider capping the costs of Renewable Identification Numbers, which small refineries purchase from their larger counterparts in order to meet obligations that they cannot produce themselves.
Eliminating the mandate and its market distortions altogether would be even better.
President Donald Trump is trying to have it both ways, promising to please small refineries and farmers at the same time, which may be impossible. The administration wants to placate farmers for political reasons, but economic reality is proving to be too much of a challenge. Instead of extending and expanding crony handouts to farmers, perhaps the administration should consider ending the trade war that has hit farmers especially hard in the first place.
Use of “biofuels” is Doctrine and cannot be changed regardless of Reality.
Haven’t had my 1st cup of coffee yet, but why is this a “barf alert”?
Maybe a mild barf-flavored hiccup alert for the pointless Trump bashing, But the renewable fuels standard has caused more harm (to everyone else) than good (to farmers).
The most valuable land in Iowa is inside of a corn farmers mailbox.
L
The most interesting part of the story was the pic where 89 Octane was called “Super Unleaded”
As far as the rest, the government created the whole issue and it ain’t gonna be easy to walk out of it with a House and others that would love to see the Farmers tank as a political weapon against President Trump....I say this with the statement about the tariffs being the problem as my proof that the author wants an unfair to America status quo to be reinstated as my “There’s your sign” moment.
E10 isn’t ruining older vehicles and equipment fast enough. They need to increase the alcohol.
-——Congress is not currently preparing to revisit the big picture——
Congress is currently doing nothing. The current Congress will not act to alter the status quo in any manner.
The Speaker of the House has lost her power and is no longer able to lead and direct.
Why the barf alert?
Ethanol in engines is a bad idea, with few upsides
The Corn Lobby is driving this nonsense
Why the barf alert? The op is correct that the corn gas mandate is insane.
Did I miss a memo? Are we supposed to love ethanol mandates now?
Zot, it’s hard to keep up!
Dunno what you've been smoking, but this is hardly barf alert material (unless you're one of the hogs who has both front trotters in the artificial market for corn trough.)
Don’t forget, it takes more input energy than the fuel output from ethanol , so it is good for the economy, and diesel does not use ethanol, so it is of no consequence to the oil supply side ( diesel). But, of course, corn as ethanol is not as important as corn for food ( corn sucks as a food source) so keeping the farmers land under the plow is more important than anything else- its not as if that land cannot be used for a viable food stock, like wheat, of course, but then wheat farmers subsidies would have to go up, as supply reduces prices.... Hmm...
Seems the world got convoluted on this equation huh?
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I agree! The only "upside" is forcing consumers to put money in the pockets of corporations like Archer Daniels Midlands and their suppliers. Concentrated good for a very few and misery at the pump for everyone else. One of the several downsides is that it takes more fossil fuel energy to produce a gallon of ethanol than you get out of it. Far from promoting energy independence it promotes energy DEPENDENCE. One of the GOPe crony capitalism legacies. You don't think that the turd that formerly befouled the white hut was the only one who did this do you?
Sooner or later, God is going to get pissed that we are burning our food.
The barf alert appears to be related to the author using the negatives about Ethanol mandate to suggest POTUS should end the trade war.
We should not have ethanol mandates period full stop but President Trump is doing a great job on trade. Tell the other countries that they should drop their one sided tariffs not that we shouldn’t fight for a level playing ground.
That is why Iowa wanted to be the first primary state. To exert their influence over food policy.
Ethanol for fuel - bad
Butanol for fuel - good
“renewable fuels standard has caused more harm”
Most folks, even here, probably never heard bout the FOOD RIOTS in ol Meheekoe when tortillas cost were doubling/tripling
I don’t like the ethanol mandates, but Trump campaigned on being pro-ethanol, so I don’t expect any serious reform while he is in office. In the grand scheme of things (barring a world-wide drought where we need to use our food for food), it is small potatoes.
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