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Policy: Environment & Energy

Examiner Editorial: Three cheers for repealing the ethanol mandate

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Editorial,Environment,Energy Department,Analysis,Energy and Environment,Ethanol

It's a rare day in the nation's capital when a bipartisan group of senators comes together to end a misguided environmental regulation that is hurting the U.S. economy, unnecessarily costing consumers and exposing American manufacturers to potentially devastating liability litigation. But that's exactly what Sen. John Barrasso, R-Wyo., Sen. Pat Toomey, R-Pa., and Sen. David Pryor, D-Ark., are doing in co-sponsoring the Renewable Fuel Standard Repeal Act.

The measure would repeal the Environmental Protection Agency program that requires refiners to blend up to 15 percent ethanol into every gallon of gas. The percentage varies with season and geography, but the problems created are uniform across the nation. Begun in 2005 and significantly expanded in 2007, the ethanol requirement has produced multiple negative consequences, as described by the senators:

• "The Renewable Fuel Standard (RFS) has contributed to higher livestock feed prices, and in turn, higher food prices. It has led to higher prices for staple products such as milk, eggs, cheese and meat, which disproportionally hurt low-income families in the United States and around the world.

• "EPA's rejection of petitions from Arkansas, North Carolina, New Mexico, Georgia, Texas, Virginia, Maryland, Delaware, Utah and Wyoming to suspend the RFS after last year's droughts suggests the agency will never find cause to suspend the RFS.

• "The RFS has contributed to higher transportation fuel prices for American motorists. Since early January, the spot prices for Renewable Identification Numbers (RINs) have increased more than 1000 percent or tenfold. Under the RFS, refiners or blenders must obtain RINs to demonstrate to EPA the volume of biofuels blended into the nation's gasoline and diesel fuel supplies. As refiners and blenders spend more money for RINs, this cost is passed on to consumers in the form of higher gasoline and diesel fuel prices.

• "The RFS has led EPA to approve E15 gasoline for certain vehicles. E15 is more corrosive than E10 and would cause damage to engines and fuel systems as well as transportation fuel infrastructure. E15 will likely result in widespread litigation between consumers and automakers, refiners and fuel marketers, as well as higher feed and food prices.

• "Beginning in 2014, the RFS effectively requires that refiners blend volumes of advanced biofuels that are currently unavailable in this country. While RFS supporters claim that it will encourage the production of advanced biofuels in sufficient quantities to meet these future mandates, it is far from clear that this will happen. The RFS has failed to incentivize, for example, the large-scale commercial production of cellulosic biofuels."

Unmentioned by the Senate trio is another crucial fact about the RFS - it benefits politically influential voters in Iowa, site of the first widely publicized presidential campaign caucuses every four years. As Duke University's Bill Chameides observed recently: "Ever wonder why in recent memory there's near-unanimous support for ethanol mandates among presidential candidates? Could it have anything to do with the all-important caucuses in Iowa, a state also known as the Corn State where 90 percent of its land is agricultural?" You think?

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