A bipartisan group of lawmakers introduced legislation on Wednesday that would eliminate the Environmental Protection Agency’s renewable fuel standard, which the group said creates an artificial market for ethanol that harms the economy.
“The federal government’s creation of an artificial market for the ethanol industry has quite frankly triggered a domino effect that is hurting American consumers, energy producers, livestock producers, food manufacturers, and retailers,” the congressmen said at a press conference.
The RFS Reform Act, introduced by Representatives Bob Goodlatte (R-Va.), Jim Costa (D-Calif.), Steve Womack (R-Ariz.), and Peter Welch (D-Vt.) would eliminate corn-based ethanol requirements, cap the amount of ethanol that can be blended into gasoline at 10 percent and require EPA to set its cellulosic biofuel standard at production levels.
“Renewable fuels play an important role in our all-of-the-above energy policy, but should compete fairly in the marketplace and not be the beneficiary of an anti-competitive government mandate,” said Goodlatte.
In 2011, five billion bushels of corn – nearly 40 percent of the U.S. corn crop — was used for ethanol.
The EPA’s targets for renewable fuels is overly ambitious, according to Costa’s office. EPA’s target for cellulosic biofuels, for instance, is higher than the amount of cellulosic biofuels that actually exist.
“When these non-existent fuels cannot be blended refiners are financially penalized, which ultimately gets passed on to consumers at the pump,” Costa said in a statement.
“The debate is over; the Renewable Fuel Standard as we know it is not sustainable,” he added.
Renewable fuels receive a large share of energy tax incentives, even though they produce less energy than fossil fuels.
“Renewable energy is expected to receive a 44 percent share of total federal energy tax preference incentives in 2013, while fossil fuels are expected to receive a 20 percent share but are expected to produce more than 7 times the energy,” according to the Institute for Energy Research.
The energy industry was quick to praise the proposal on Wednesday.
“The Renewable Fuel Standard Elimination Act recognizes that betting on the RFS to work is like betting against reality, eventually you lose,” said Charles Drevna, president of American Fuel & Petrochemical Manufacturers. “The RFS was founded upon baseless assumptions and now eight years later, the reality is that there is no fix for this broken program, which is why AFPM fully supports the elimination legislation.”
The ethanol industry was not as positive about the proposal.
“Killing the corn ethanol provisions of the RFS and prohibiting consumers from having the option to buy E15 don’t constitute ‘reform,’ they are heavy-handed government regulations coming from members of Congress who apparently don’t like how the RFS ensures competition in the fuel market,” said Brian Jennings, executive vice president of the American Coalition for Ethanol.
“This is just a smokescreen for going after the one alternative fuel and the one policy that has fundamentally disrupted oil industry control of the marketplace while saving consumers money at the pump,” the Advanced Ethanol Council said in a statement.