Time to close the books on U.S. biofuels policy

Today, seventeen industry leaders from a diverse swath of America’s business landscape have convened in Washington united in concern over bad government policy albeit hopeful that a solution is near. Representing interests as disparate as cattle ranchers to snowmobile manufacturers and concrete producers, these men and women have come from across the country to make a final plea to the Environmental Protection Agency (EPA) to stick to proposed reductions to the Renewable Fuel Standard’s biofuel blending requirements in 2014. As the EPA’s final ruling looms, it’s become all too clear that America’s biofuels policy has failed as consumers face consequences like engine damage, greater gasoline costs, rising food prices and dirtier air as more and more ethanol is blended into our gasoline supply.
 
Confronted by rising foreign oil imports and heightened demand for gasoline in 2005, policymakers thought it wise to mandate the blending of biofuels —mostly in the form of corn-based ethanol— into U.S. gasoline to address what appeared to be a dark energy future. Fortunately, since that time, nothing short of a domestic energy miracle has increased production at home, diminished our import reliance and transformed America’s energy landscape. At the same time, gas demand has tempered as vehicle technology continues to improve and our cars become more efficient. Yet, all the while, the EPA has insisted that more ethanol be burned despite cries from consumers and industry alike.
 

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By requiring 16.55 billion gallons of biofuel be blended into U.S. gasoline last year, the EPA has pushed the United States to the edge of the “blend wall”―the threshold at which the Renewable Fuel Standard (RFS) requires more ethanol be blended into our gasoline than our nation’s engines and infrastructure can safely accommodate. Despite the EPA’s acknowledgement that we have reached the blend wall and that there are constraints to using higher ethanol quantities, the agency continues to push gasoline blended with 15 percent ethanol (E15) despite its unsuitability for use in heavy-duty vehicles, vehicles built before 2001, marine engines and small engines such as lawnmowers and chainsaws due to engine failure. In fact, more than 90 percent of the vehicles on the road today are not approved by manufacturers to use E15, including most 2001-2013 models.
 
In spite of EPA’s approval, newer vehicles also experience mechanical trouble with ethanol according to a recent Coordinating Research Council study. Chrysler, Ford, General Motors, Honda, Toyota, Nissan and BMW have said their warranties would not cover engines that use more than 10 percent ethanol because it’s corrosive and harms engines. Thus, the EPA is, in effect, putting consumers on the hook for costly repair bills and at -risk on the road.
 
As if that’s not enough, consumers are forced to return to the pump more frequently and at greater cost since ethanol fuel blends (like E15) have 33 percent less energy per gallon than regular gasoline and deliver lower mileage.
 
The sting doesn’t stop with our cars and engines. With more than 40 percent of the U.S. corn crop now earmarked for ethanol production, food producers are struggling to secure adequate and affordable supplies of the commodity that accounts for up to 70 percent of the grain fed to animals. This is no easy feat as corn prices have spiked 275 percent since the RFS was implemented — a crippling consequence as feed represents the largest single cost in raising chickens, turkeys, cows and hogs. To make matters worse, when the price of raising livestock and poultry grows, shoppers pay more for these items at the grocery store.
 
Just look at rising grocery costs across the country. Since the RFS was expanded in 2007, prices for cereal and bakery products in the United States have risen 77 percent, while prices for meat, poultry, fish and eggs have increased 78 percent.  Altogether, the average U.S. family of four faced a $2,000 increase in food costs last year due to the effects of higher corn prices brought on largely by the RFS.
 
And for what? Since its implementation, the RFS has contributed to the plowing of more than 23 million acres of wetlands and grasslands – an area the size of Indiana – in order to grow crops to meet our ethanol mandate. Overall, lifecycle greenhouse gas emissions from corn ethanol in 2012 were higher than from gasoline ―and will be for years to come according to analysis by the EPA, the very organization responsible for raising the corn ethanol mandate.
 
The ongoing cost of supporting the biofuel industry through mandates and subsidies has been estimated to cost the U.S.  $159 billion from 2008 to 2022 at the expense—literally— of American consumers and the various industries they work in. The EPA has wisely proposed to reduce 2014 blending requirements in order to avert the looming blend wall crisis. Let’s hope they stick to this proposal when they finalize their ruling in the coming weeks as a sign of good faith to the many businesses and citizens that have raised concern with this policy and the many consequences it leaves in its wake.

Ken Klippen is the Spokesperson for The National Association of Egg Farmers. Greg Gibeson is a member of the board of directors for the Recreational Boaters of California.