Roundheads Against King Corn: Why the Renewable Fuel Standard Deserves To Die

On the day before Thanksgiving, the Environmental Protection Agency (EPA) announced the final levels of renewable fuel required to be blended into gasoline next year, officially known as the Renewable Fuel Standard (RFS). In 2017, the RFS will rise to 19.28 billion gallons, up from 18.11 billion gallons in 2016.

A part of the Energy Policy Act of 2005, which was expanded in 2007 by the Energy Independence and Security Act and is administered by EPA, RFS requires 36 billion gallons of renewable fuel sources, such as ethanol, be blended into gasoline and diesel fuel by 2022.

Two reports released by the Government Accountability Office (GAO) just days after EPA’s approval of the blend increase suggest RFS has been and will continue to be a complete failure, with the program’s goals, both in number of gallons produced and in the reduction of carbon-dioxide emissions, nowhere close to being met in 2022.

“It is unlikely that the goals of the RFS will be met as envisioned because there is limited production of advanced biofuels to be blended into domestic transportation fuels and limited potential for expanded production by 2022,” one of the reports states.

The overwhelming amount of the ethanol being produced is conventional, corn-starch-based ethanol, which does little to reduce carbon-dioxide emissions. The creators of RFS depended on the use of “advanced” biofuels — those made of crop residue, waste fats, and oils — to be responsible for the bulk of the mandated reduction in carbon-dioxide emissions, but only 95% of the advanced biofuels required are being produced.

“In the absence of advanced biofuels,” the second of the reports notes, “most of the biofuel blended under the RFS to date has been conventional cornstarch ethanol, which achieves smaller greenhouse gas emission reductions compared with advanced biofuels.”

What’s more, outside of the biofuel lobby, the RFS has a deleterious effect on the economy. The EPA itself has gone on record to note the RFS has resulted in up to $3.5 billion in higher fuel costs since 2014. The Center for Regulatory Solutions (CRS) released a series of reports showing the harm the RFS is having on state economies.

For example, in The Heartland Institute’s home state of Illinois, CRS argues the RFS has led to unnecessarily high fuel costs totaling $5 billion through 2014, and CRS says the RFS will cost Illinois residents another $17 billion through 2024. These higher fuel costs will depress labor income by roughly $7 billion by 2024, spiking more than 7,000 potential new jobs per year and causing more than $12.1 billion in lost GDP.

The RFS has also increased demand for corn used for ethanol production. Diverting corn to ethanol production means livestock farmers have had to spend more on feed for their livestock. In 2012 alone, Illinois livestock farmers spent $164 million more on feed than they would have without RFS in place.

Proponents of RFS primarily rely on two main talking points: RFS will reduce carbon-dioxide emissions, and RFS will reduce American dependence on foreign oil. The latter reason for RFS has been negated by the boom in oil and natural gas production caused by hydraulic fracturing and horizontal drilling, and the former was never reasonable to begin with.

Biofuel production requires a great deal of land, disrupting the carbon-storing potential of the soil. Again using Illinois as an example, since implementation of the RFS in 2005, the Land of Lincoln has experienced more than 22,000 tons of soil erosion as a direct result of increased corn production.

This extra land use at least partly offsets emissions reductions that may have been achieved by substituting ethanol for regular gasoline. A study published in October 2016 in the peer-reviewed journal Climatic Change came to the conclusion U.S. biofuel use has actually resulted in a net increase in carbon-dioxide emissions.

So if the RFS is economically and environmentally worthless — and all the data suggest it is — why does it continue to exist? Because programs with a small number of beneficiaries and a much larger, dispersed number who shoulder the costs, as is the case with the RFS, are hard to dismantle.

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    The RFS has been achieving its actual goals for over a decade now. “Renewable” Fuels are very effective in transferring vast amounts of wealth from poor people to rich people.

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