Report: Renewable Fuel Mandate Rewards Ethanol Lobby at Consumer Expense

A new Competitive Enterprise Institute report makes the case for repealing the federal biofuels mandate, citing its numerous economic, ethical, and real-world problems.

“Congress should repeal the Renewable Fuel Standard so that consumer preference and competition, rather than central planning policies, determine which fuels succeed or fail in the U.S. marketplace,” said Marlo Lewis, CEI senior fellow and author of the report.

In June, a group of 39 U.S. Senators led by Chuck Grassley (R-Iowa) and Amy Klobuchar (D-Minn.) urged the Environmental Protection Agency get “back on track” with compelling oil refiners to comply with the program’s increasingly unattainable goals. The EPA is scheduled to finalize 2017 requirements for the federal RFS mandate later this year.  

The CEI report warns that trying to force annual increases in ethanol/oil blending could spur oil refiners to simply reduce the domestic supply of gasoline and diesel – which would inflate fuel prices and impose new economic costs.

“Contrary to ethanol lobby propaganda, the blend wall is not a product of oil industry [scheming] but of economic and technical realities,” the report explains.

Most vehicles on the road today, as well as lawn mowers, motorcycles, boars, and other small engines, are not designed to use high biofuel blends. Moreover, there’s simply little consumer demand for cars and equipment that can use higher blends. Those fuels reduce fuel economy, forcing consumers to spend more, and fill up more frequently, to drive the same distance. Ethanol contains about a third less energy than an equal amount of gasoline.

Today, Marlo Lewis will speak at a Capitol Hill panel on this topic, at 3pm ET.

View the CEI report, Running Drivers into the Blend Wall: Push to Ratchet up Renewable Fuel Standard Rewards Ethanol Lobby at Consumers’ Expense