Don't mess with the Renewable Fuel Standard
By Minnesota Gov. Mark Dayton and Iowa Gov. Terry Branstad
We are governors from neighboring states and different political parties. We don’t agree on everything, but we stand united in our belief that our nation needs a robust Renewable Fuel Standard (RFS) and together in our opposition to the Environmental Protection Agency’s proposal to weaken the RFS.
Since Congress enacted the RFS in 2005 by huge bipartisan margins, it has provided the secure policy foundation that rural America needs to continue investments in renewable fuels. Those investments yield excellent returns. They diversify our nation’s energy portfolio, clean the air, grow opportunities for businesses, create good paying jobs in rural America, add value to farm products and give consumers lower-cost choices at the pump.
Big Oil dislikes renewable fuels, and has used its clout in Washington, D.C., and at state capitals to thwart their progress. When Minnesota became the first state to require all gasoline sold to contain at least 10 percent ethanol (E10), Big Oil predicted fearsome disasters. They warned that ethanol would clog cars’ carburetors and explode their engines, dis-rupt supply lines causing gasoline shortages, and increase the price at the pump for consumers. None of that happened.
The petroleum industry also claimed that the RFS causes higher fuel prices. In fact, the opposite has proven true. On Feb. 4, 2014, regular gasoline in Cresco, Iowa, a town about 15 minutes from the Iowa-Minnesota border, was selling for $3.44 per gallon. E10 was selling at $3.13 per gallon. E85 fuel, which is 85 percent ethanol, was selling for $2.60 per gallon at the same station — 84 cents per gallon cheaper than regular gasoline.
A recent study at Iowa State University found that, “Feasible increases in the ethanol mandate in 2014 will cause a small decline in the price of E10. ... Our results should reassure those in Congress and the Administration who are worried that following the RFS commitment to expanding the use of renewable fuels will result in sharply higher fuel prices for consumers.”
The Environmental Protection Agency previously estimated that by 2022, renewable fuels would replace 13.6 billion gallons of gasoline and diesel consumption and save motorists nearly $12 billion each year. The EPA also predicted that this displacement of gasoline and diesel would reduce annual greenhouse gas emissions by 138 million metric tons, equivalent to removing 27 million vehicles from our nation’s highways. Ethanol can increase competition and save consumers money, provide real choice at the pump, and drive innovations and efficiencies that are good for the economy.
With those enormous benefits ahead, why would the EPA issue the first-ever reduction in the Renewable Fuel Standard? The agency is proposing a 16 percent reduction for ethanol and a biodiesel target 500 million gallons below 2013 production. Otherwise, it says, the ethanol industry will produce too much product to blend at only 10 percent with the nation’s gasoline supply, and the percent of ethanol in some gasoline will be forced higher. The American Petroleum Institute claims this blend would damage car engines.
Yet, automobile manufacturers now make certain cars with “flex-fuel” engines. They can run efficiently on any proportion of ethanol, up to 85 percent (E85). If those engines were installed in more cars, then, consumers could choose the lowest-priced blend every time they drove to the pump.
Without innovation, diversity, and competition in our nation’s transportation fuels, our nation’s energy policy will remain stuck in the same old rut. No one wants to change anything, unless there’s a crisis. Even then, energy’s “Old Guard” cares most about keeping its share of the market. So, when an energy alternative, like ethanol, promises real competition, the dinosaurs do everything possible to eliminate it.
Over the last two months, the EPA has been provided with recent data that presents the agency with the opportunity and obligation to restore the 2014 RFS levels. If the EPA’s proposed RFS rules are made permanent, they will cause serious harm to farms and communities throughout rural America. Local, state, and federal leaders proclaim their deep concerns about creating jobs; yet, too often, their policies have the opposite effect. The EPA’s proposal would destroy jobs manufacturing biofuels and eliminate opportunities for many of America’s farmers to add value to their products.
Renewable fuels have breathed new economic life into many distressed rural areas. They put money in the pockets of farmers, workers and owners; and every business on Main Street shares the benefits. They have even sparked a renewed interest in agriculture among young people, who now see a future in farming. People from all walks of life, all across rural America, and across party lines stand firm in our resolve for a robust RFS. Will Washington listen to us or to Big Oil?