June 20, 2013 -
Senators say RFS is a broken, expensive government program that needs to go.
WASHINGTON, DC – Today, U.S. Senators John Barrasso (R-WY), Mark Pryor (D-AR) and Pat Toomey (R-PA) introduced “The Renewable Fuel Standard Repeal Act” (S. 1195). The bill would repeal the Renewable Fuel Standard (RFS) in its entirety.
“The Renewable Fuel Standard is fundamentally broken and beyond repair,” said Senator Barrasso. “Instead of delivering meaningful environmental benefits, it’s driven up food and fuel costs for American families. This flawed program will also inevitably lead to widespread lawsuits against American manufacturers. When Congress enacts bad policy, the right response is to scrap it and start over.”
“The Renewable Fuel Standard isn’t working for consumers, refiners, or livestock groups,” said Senator Pryor. “These mandates are unworkable and need to be overhauled. Repealing the RFS will allow us to develop a new policy for advanced biofuels without driving up Arkansans’ gas and food prices.”
“The biofuel use requirements have a negative effect on our economy,” said Senator Toomey. “Not only does the mandate likely harm our car engines, it drives up farmers’ and ranchers’ costs and causes increased prices in almost everything we buy in the grocery store. Current rules require refiners to blend increasing amounts of biofuels especially corn ethanol into the nation's gasoline supply. The result is that corn prices have shot up and this is troubling for Pennsylvania livestock farmers who devote about half their operating costs to feed. I have heard firsthand from many constituents just how damaging this policy has been. And it is particularly harmful to lower-income families who spend a greater percentage of their paycheck on groceries. It is ill-advised and unsustainable and that is why I have joined Senator Barrasso in an effort to abolish these renewable fuel standards.”
In 2005, Congress established the RFS effectively requiring refiners to blend increasing volumes of biofuels (e.g., corn ethanol) into the nation’s gasoline supplies. In 2007, Congress expanded the RFS effectively requiring refiners to blend much larger volumes of biofuels and advanced biofuels (e.g., cellulosic ethanol) into the nation’s gasoline and diesel fuel supplies.
In addition to Senators Barrasso, Pryor and Toomey, “The Renewable Fuel Standard Repeal Act”
(S. 1195) is co-sponsored by Senators John Boozman (R-AR), Saxby Chambliss (R-GA), Ted Cruz (R-TX), Mike Enzi (R-WY) and Tim Scott (R-SC).
S. 1195 would repeal the statutory authorization for the RFS as well as the regulations implementing the RFS. On May 22, 2013, Senators Barrasso and Toomey filed an amendment (#1060) to S. 954 (the farm bill) which included identical language. The Senate did not take up the amendment.
• The 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.