RFS Should Be Based on Science, Not Politics
By Michael James Barton
In the final polls, Ted Cruz was slated to place second in Iowa. Considering he loudly criticized the Renewable Fuel Standard -- the Washington boondoggle that turns corn into ethanol gold for Iowa farmers -- days before the Caucus, Cruz's victory was particularly surprising.
You know a law is crazy when its biggest beneficiaries vote for someone who wants to end it.
Shockingly, the RFS will soon do even more damage. The Environmental Protection Agency recently mandated that even more ethanol -- and other renewable fuels -- be blended into gasoline in 2016. That's a big mistake: the RFS is bad for the environment and bad for the economy.
Congress created the RFS in 2005 and bumped it up in 2007. This latest jump in the standard requires over 18 billion gallons of biofuels be blended into the fuel supply for 2016.
The purpose of mandating the addition of ethanol to gasoline in the first place was to decrease our dependence on foreign oil sources and do less environmental damage. But since the RFS was created, the United States has overtaken both Saudi Arabia and Russia to become the world's largest oil and natural gas producer.
So, we're less dependent on foreign energy than ever, and the RFS has nothing to do with it.
Scientists have also questioned the supposed environmental benefits of ethanol. In 2014, the United Nations Intergovernmental Panel on Climate Change released a report acknowledging "biofuels indirect emissions -- including from land use change -- can lead to greater total emissions than when using petroleum products." The International Institute for Sustainable Development has concluded that after factoring in the energy demands from all the aspects of crop cultivation, there are no net environmental benefits.
Instead, the RFS is costing Americans. Each gallon of biofuel gets a code -- known as a Renewable Identification Number -- that allows it to be tracked through the supply chain and sold in a secondary market. The EPA ensures compliance with renewable fuel mandates by tracking how many RINs refineries purchase compared to their petroleum output.
But this secondary market has been anything but stable. In the past few years, RINs have fluctuated from one cent a gallon to over a dollar because of a draught-caused corn shortage. These added costs are passed on to the gas pump.
While we're currently enjoying record low gas prices, that's no thanks to the RFS. It has artificially created price instability in the fuel market and amounts to a massive hidden tax at the pump.
The RFS is also picking Americans' pockets at the grocery store. The RFS has expanded the market for corn greatly -- 40 percent of all corn grown in America is used for ethanol. Consequently, more farmers are growing corn instead of other important foodstuffs. In fact, the RFS has increased costs for chain restaurants by up to $3.2 billion annually -- likewise costs that get passed on to consumers.
The bottom line is that every reason underlying the establishment of the RFS has been proven wrong or outdated. The RFS doesn't contribute to energy independence, does nothing for the environment, and is harmful to agriculture.
The RFS has always been more about politics than practical concerns. Even Iowans recognize that it's time to end it.
Michael James Barton is the Energy Advisor at ARTIS Research and speaks around the country on energy and energy security matters. He previously served as the deputy director of Middle East policy at the Pentagon. Disclosure: Mr. Barton supports Ted Cruz's campaign.
