Prime examples include EPA’s refusal to grant reasonable ethanol production waivers requested by eight governors in the face of the devastating 2012 drought; failure to properly adjust cellulosic ethanol requirements even though commercial quantities of the mandated fuel do not exist; and the agency’s continued refusal to scrap the E15 mandate even when confronted with overwhelming evidence that its use could damage most vehicles on the road today, costing American consumers millions in auto repairs. And the fuel is incompatible with roughly half of the nation’s gas station pumping equipment.
This is not a surprise to EPA. The automobile, oil industry, AAA and others have made plain their concerns about the damage that could be caused by E15.
And risk from E15 isn’t just restricted to vehicles. E15 is also incompatible with half of all retail station equipment in the country. The thousands of small business owners who manage the vast majority of America’s filling stations could be forced to make costly modifications to their storage and pumping equipment to prevent corrosion and spills from E15.
Again, this isn’t a surprise; government labs alerted EPA of serious compatibility problems between E15 and gas station equipment.
Beyond damage to property, RFS Implementation could also result in fuel rationing due to a concomitant decrease in production to meet the E15 blend volume requirement, which could mean as much as a $770 billion decrease in U.S. GDP and a $580 billion decrease in take-home pay for American workers by 2015, according to NERA Economic Consulting.
To stop E15 implementation before it damages millions of vehicles and cost the American economy billions of dollars, the American Petroleum Institute and 17 other petitioners, including farm groups and food industry organizations are taking the case to the Supreme Court. Whatever the Supreme Court decides, the best solution remains total repeal of the unworkable RFS mandate.
The fact is America’s energy outlook is drastically different than it was in 2007 when Congress created the RFS program. RFS was written at a time of energy scarcity and insecurity. Since then, technological advances in hydraulic fracturing and horizontal drilling have unlocked vast domestic reserves, making us the world’s leading natural gas producer and putting us on track to lead in oil production by 2020.
Today, oil and natural gas imports are down, and America’s greenhouse gas emissions have dropped to 1994 levels, thanks largely to increased use of North American sourced natural gas. Simply put, the American energy revolution has rendered the RFS obsolete by achieving its two primary goals, increasing energy security and decreasing greenhouse gas emissions.
It is clear that biofuels have an important role to play in America’s all-of-the-above energy approach, and our nation’s world-class refiners will continue to use biofuels with or without the RFS mandate.
It is equally clear that RFS is a failed program, and that the amount of renewable biofuels in the marketplace should be guided by the technological capability of producers, consumer demand and market reality. By any objective measure RFS fails on all of these levels.
Because EPA continues its headlong implementation of E15, the only solution is for Congress to act quickly and repeal the RFS mandate before it needlessly harms America’s consumers and our economy.
Greco is downstream Group Director for the American Petroleum Institute.