Why the Renewable Fuel Standard is a threat to our nation’s supply chain security
The record-breaking high temperatures in the Pacific Northwest and lengthening Atlantic hurricane seasons add to the mounting evidence of climate change. Recognizing this reality, the Biden administration has set in motion a strategy and plans to accelerate the national transition from fossil fuels to renewable energy. However, we must manage this energy transition prudently and avoid unintended consequences that could threaten our security and economic stability.
All of us can vividly recall the panicked stockpiling that led to widespread grocery shortages in the early days of the global COVID-19 pandemic. More recently, millions of Americans along the eastern seaboard experienced higher gas prices and supply shortages caused by a criminal ransomware attack on the Colonial Pipeline. Both incidents are evidence of disruption to the nation’s supply chain and critical infrastructure.
What Americans may not realize is that our nation’s supply chain is not merely a matter of whether grocery stores are fully stocked, and gas stations have enough fuel supplies. The strength of America’s supply chains is an indicator of our security and economic standing in the world. It determines our dependence on foreign suppliers to meet consumer demand, and our reliance on other countries — including rivals and adversaries, like China — to support our military readiness and mission capability.
In effect, any weaknesses in America’s supply chain indicate to national adversaries — and criminal opportunists — our nation’s greatest vulnerabilities. And right now, our own federal policy — the Renewable Fuel Standard (RFS) — is weakening our supply chain security.
America’s refineries transform crude oil into products that are ubiquitous and perform essential functions across our society, from transportation fuel to heating oil to kerosene. They also produce the gasoline, maritime and jet fuel that power our nation’s military ships and aircraft.
The RFS is a complicated regulatory program administered by the EPA to promote blending biofuels into gasoline and diesel fuel. For America’s independent refiners, the cost to comply with the RFS is on track this year to exceed all other costs of running their refineries — salaries, benefits, maintenance, and more — combined.
Buckling under these growing costs, refineries are now faced with the choice of reducing fuel production or suspending operations. America’s domestic refineries are closing at accelerating rates. The East Coast alone has lost eight refineries since 2000. Today, only four remain.
This limited refining capacity makes our national supply chain more vulnerable to cyber-attacks or natural disasters which disrupt fuel availability. And as more refineries close, our military bases and troops will experience supply shortages domestically and abroad.
Last year, a report by the non-partisan Government Accountability Office found that the average annual mission capable rate has decreased since fiscal year 2011 for Air Force, Navy and Marine Corps aircraft. While due in part to aging aircraft and maintenance challenges, it was also due to supply shortages.
Amidst rising global tensions, any additional U.S. refinery closures will increase our dependence on foreign refiners in rival nations — primarily China — for our own fuel supply, putting the U.S. in a position of weakness. In fact, China recently eclipsed the U.S. as the refining center of the world, having significantly bolstered its refining capacity. During the same two years that China was investing in its refining infrastructure, the U.S. imported hundreds of millions of gallons of foreign biofuels just to manage compliance with the RFS.
Earlier this year, the Biden administration announced it would take several actions to strengthen supply chains. President Biden has vowed to confront “the ambitions of an autocratic China.” The Biden administration’s focus on our nation’s supply chain security and on curbing China’s aggressive strategy are welcome. But it is more than a little disconcerting that a well-meaning policy to increase biofuels has become a self-inflicted wound that poses an ever-growing threat to our national security and global standing as more domestic refineries succumb to the unsustainable costs of the RFS.
The Biden administration must not allow the unintended consequences of the Renewable Fuel Standard to undermine our supply chain security. For the sake of our national security and economic stability, the Biden administration must act now to address the impacts of the RFS.
Sean O’Keefe is a professor at the Syracuse University Maxwell School and previously served as secretary of the Navy and NASA administrator in the George W. Bush administration.
General Anthony C. Zinni, USMC, Ret. served as commander in chief for United States Central Command from 1997 to 2000.
This piece has been updated.