Renewable Fuel Standard subsidies unneeded as sales of cleaner vehicles surge

2013-10-28T00:00:00Z Renewable Fuel Standard subsidies unneeded as sales of cleaner vehicles surgeBy Mark J. Perry Arizona Daily Star
October 28, 2013 12:00 am  • 

How did we reach the point where the government is promoting a dreadful fuel that gets worse fuel economy than gasoline or diesel, drives up food prices, damages car engines and has unintended environmental consequences?

The Renewable Fuel Standard has come to symbolize everything that is wrong with government-imposed mandates. It is causing more harm than good and should be scrapped.

For years, ethanol was promoted as a renewable, homegrown alternative to gasoline, a way to reduce tailpipe emissions and dependence on imported oil.

In 2007, as part of the Energy Independence and Security Act, Congress adopted the RFS, requiring refiners to blend 13.8 billion gallons of ethanol into gasoline by 2013 and up to 36 billion gallons by 2022. This mandate has become completely unworkable and unnecessary.

Ethanol is not the panacea its promoters claim it is. Let’s start with the fact that the biofuels industry is actually burning large amounts of gasoline to produce ethanol — and the ethanol contains less energy than the gasoline consumed to produce it.

Next consider emissions. One of the myths about the ethanol mix, called E10, which is 10 percent ethanol and 90 percent gasoline, is that it burns cleaner than gasoline. But ethanol has 27 percent lower fuel economy than gasoline on an energy-equivalent basis, hence consumers have to purchase more fuel to drive the same distances.

One of the unintended consequences of ethanol’s poorer mileage is higher than expected releases of greenhouse gases.

Another ethanol problem: Since the mandate took effect, fuel consumption has dropped dramatically, largely due to increased fuel efficiency in new vehicles, and therefore less biofuel is needed.

What’s more, gasoline itself has changed for the better. For one thing, it contains substantially less sulfur than it once did, and it will contain even less in the near future.

U.S. refiners have lowered gasoline sulfur nearly 90 percent since 2004, and are gearing up to produce even lower-sulfur gasoline to comply with a new air-quality standard that the EPA proposed earlier this year.

Over the years, the ethanol lobby has claimed that ethanol would help America achieve energy independence. But that argument has completely fallen apart as evidenced by the dramatic surge in domestic oil production due to deep-water drilling and the shale revolution.

U.S. oil production reached a 24-year high in October, and our nation’s dependence on imported oil continues to decline.

America is paying a huge price for ethanol, an inferior fuel that’s no match for gasoline or diesel and is only benefiting a small set of special interests. Congress should repeal the RFS, a mandate that never should have been adopted in the first place.

Mark J. Perry is a professor of business and economics at the Flint campus of the University of Michigan and a scholar at the American Enterprise Institute.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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