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Friday RFS Roundup – 7/25

Back in April, the Federal Trade Commission (FTC) proposed labeling requirements for gasoline blends, particularly for ethanol-blended gasoline. This would require fuel makers to release more information on ethanol concentrations to provide greater detail on what consumers are putting in their fuel tanks. With summer driving upon us, we wanted to know what our advocates would put on their warning labels. Check out our Twitter and Facebook to see what they came up with this week.

Learn more from this week:

Chicago Sun-Times,  New Fuel Isn’t Right Mix for Chicago: On Monday, July 28th, Chicago’s Finance Committee will be voting on proposed legislation that would require all Chicago gas stations to offer E15 (gasoline with 15 percent ethanol) at their fueling pumps. In this editorial, the negative effects on Chicagoans ares clearly defined, including E15’s damage on common engines, its cost on motorists and the significant burden this mandate could have on local gas stations. Without any proven market, this mandate is detrimental to Chicago’s motorists and local gas stations.

In Short: “Requiring Chicago gas stations to start offering E15 while other areas don’t is premature for several reasons… The ordinance could place such a big burden on service stations that some of them would close. No stations right now are certified to pump E15 gas. Six stations citywide are set up to pump fuel with even more ethanol than E15, but even they would have to make some changes to comply with the ordinance. The other roughly 400 stations, though, would face costs as high as $300,000 to make the change, according to the Illinois Retail Merchants Association. E15 would require new certification for tank systems, pump and line systems. That’s a big financial burden for a product for which there is no proven market.”

The Hill, RFS Props Big Ethanol, Hinders Small Businesses: Charlie Drevna, president of American Fuel and Petrochemical Manufacturers, discusses the significant impacts that the RFS has on consumers, their vehicles and local businesses trying to meet the market demands. As more and more automakers declare their warranties void with the use of E15, vehicle owners are responsible for the damage that ethanol causes on their vehicles. Moreover, this policy places a significant burden on small business owners who are trying to match consumer demand. However, as ethanol levels increase in our fuel supply, small gas stations are forced to carry this higher blended fuel and could face legal action if misfueling takes place on site. 

In Short: “Outside of EPA’s 2014 proposal, more and more members of Congress are recognizing the numerous problems associated with increasing amounts of ethanol in U.S. gasoline. In fact, more than 220 bipartisan members of congress have expressed support for lowering the ethanol mandate in hopes of addressing the policy’s impacts on consumers, automakers, engine manufacturers and other affected industries. Like Sens. Grassley and Klobuchar, I too urge Washington to ignore special interests. The market, not Big Ethanol, should dictate what’s best for our consumers, businesses and bottom line.”

Platts, The Political Calculations of Ethanol in Iowa and in Washington: In this political analysis, author Herman Wang looks at the role that the RFS plays in U.S. presidential candidacy races. As Iowa hosts the first-in-the-nation nominating caucus, candidate wins are dependent on their endorsement and support of the RFS. Sounds like a case of politics over policy to us…

In Short: “Conventional political wisdom has held that given Iowa’s importance in US presidential contests as host of the first-in-the-nation nominating caucuses, the Renewable Fuel Standard is pretty much unassailable. The federal biofuels mandate enjoys immense bipartisan support in the state, where corn is king. Candidates hoping to curry favor with state voters would need to wholeheartedly endorse the RFS or at least pay lip service to the law while campaigning there. Iowa, after all, leads the nation in biofuels production, with 41 ethanol plants in the state, along with 18 biodiesel facilities.”

Smarter Fuel Future Advocates’ Ethanol Warning Labels

From Barbara T.

From Bill S.

From Bradford T.

From David A.

From Dudley D.

From Edward G.

From Franklin M.

From Howard S.

From Linda R.

From Lisa W.

From Lucinda S.

From Marilyn L.

From Mary O.

From Mike R.

From Patricia C.

Phillip R.

From Tom K.

From Walter E.

From William T.


Friday RFS Roundup – 7/18

This week, we saw continued coverage on the diverse effects that ethanol mandates have on American consumers. From increased food costs to environmental threats and governmental boondoggles, ethanol mandates harm consumers across the nation. And yet, the American people are still waiting for action from the EPA, which is now almost eight months late on releasing the 2014 blending requirements.

Learn more from this week:

NBC News, Heartland Water Crisis: Why the Planet Depends on These Kansas Farmers: Part two of a three-part series, journalist Brian Brown details America's Breadbasket crisis and the depletion of the Ogallala Aquifer, one of the U.S.’ major water sources. In this investigative piece, Brown finds that for US farmers, growing corn presents a morality problem, but US policy urges more growth. With $45 billion subsidized to produce ethanol since the 1980s, this large scale of production threatens our water & food supply.

In Short: “For farmers like Mitch Baalman, corn presents an immediate math problem. On average, a corn crop needs 24 inches of water during its growing season. But, under the rules of the new LEMA, that total would represent nearly half of his five-year allotment. ‘We’re going to have to change the mindset,’ Baalman says. ‘Pull the throttles back. Plant more alternative crops. We’re just not going to be corn, corn, corn—even though that’s what the insurance is telling us and that’s what the government is subsidizing. I would love to raise corn, too. But we can’t.’”

Chicago Tribune, Why is the EPA Stalling on Ethanol?: In this analysis, Chicago Tribune is just as perplexed as we are regarding the 2014 blending requirements that the EPA has already proposed to reduce, but hasn’t actually done so yet. This is a policy that increases consumer costs, takes away free market choice and favors one industry over all others. With each day that the EPA does not take action against this failing policy, consumers will continue to carry the consequences. 

In Short: “In the midst of all the political pressure, the EPA has stalled. The agency long ago missed a Nov. 30 deadline to set the final standard. It still hasn't issued a final decision, though we are halfway through 2014. The resulting uncertainty has left the motor fuel industry in the lurch. By making it impossible for fuel blenders to plan in a timely manner, the EPA's inaction has raised costs for them and consumers. Depending on what the agency eventually decides to do, it could temporarily disrupt fuel supplies. The EPA needs to resolve this now. But the ultimate answer lies with Congress. It's time to end the Renewable Fuel Standard.”

Consumerist, Get Ready to Pay More for Chocolate; Hershey Raises Prices for First Time in 3 Years: The headline says it all. Because of various rising commodity costs, including dairy prices, the global candy company is forced to increase its sales prices by eight percent next year. While we can’t speak for all the rising commodity prices, ethanol mandates have a direct effect on increasing dairy prices. As the price for corn and feedstock rises, these increases are passed onto the farmer, and eventually, the consumer.

In Short: “’Over the last year key input costs have been volatile and remain at levels that are above historical averages,’” said Michele G. Buck, President, North America, The Hershey Company, in a statement. “’Commodity spot prices for ingredients such as cocoa, dairy and nuts have increased meaningfully since the beginning of the year. Given these trends, we expect significant commodity cost increases in 2015.’”

Ethanol Lobby’s Solution to Ethanol Glut – Use More Ethanol.

Last November, the Environmental Protection Agency (EPA) acknowledged that the level of ethanol the government mandates be blended into fuel will soon exceed the level of ethanol that can safely go into the fuel supply -- a “tipping point” known as the blend wall.

In order to prevent Americans from hitting the blend wall, the EPA proposed lowering the 2014 mandate. With this proposal came major political pressure from ethanol makers and now the EPA is considering backing down.

So, what is the ethanol lobby’s solution to the blend wall? Surprising to no one, they recommend…more ethanol.

Ethanol companies say that the blend wall can be avoided if more motorists use higher blends of ethanol like E15 and E85—which contain 15 and 85 percent ethanol respectively, instead of the standard E10 which only contains 10 percent ethanol.

Unfortunately, this proposal is completely divorced from reality and is also a raw deal for consumers.

  1. Nonexistent Demand — Americans aren’t buying the flex-fuel vehicles necessary to run on E85, and the ones who do, aren’t filling up with it. Only a mere 5 percent of U.S. light-duty vehicles on the road are able to run on E85 and only 4 percent of those vehicles actually use it. Even by 2022, the Congressional Budget Office expects only 1 billion of the 125 billion gallons of blended gasoline to be used that year will be E85.
  2. Lower Fuel Economy — Compared side-by-side, ethanol is 33 percent less efficient than regular gasoline. E85 is estimated to deliver 25-30% fewer miles per gallon than the 10% ethanol blend that currently exists in most of today’s gas, which leads us to our final  point…
  3. Higher Adjusted Prices — When the price of E85 is price-corrected for miles per gallon, it is 40 cents a gallon higher than premium gasoline.

…And don’t get us started on the environmental and economic issues associated with ethanol mandates.

Tell Washington not to cave to Iowa – It’s time to reform ethanol mandates.

Is this the Worst Policy in America?

Even the government thinks so…

In late June, the non-partisan Congressional Budget Office (CBO) released a report detailing how much full implementation of the Renewable Fuel Standard (RFS), America’s ethanol mandates policy, would cost.

For the first time since the ethanol mandate was enacted, a government agency has confirmed what the refining industry has said for years…forcing ethanol into our fuel supply will increase gas prices.

How much? Up to 9 percent—or 26 cents—per gallon in just three years. Price increases of any size have impacts, but a jump that substantial is bound to create ripples throughout our economy and in Americans’ wallets.

Beyond the increase in gas prices, the CBO laid out some significant challenges to actually meeting the requirements of the RFS.

“The rising requirements in EISA would be very hard to meet in future years because of two main obstacles, which relate to the supply of cellulosic biofuels and the amount of ethanol that older vehicles are said to be able to tolerate.”

As we’ve mentioned before, cellulosic biofuels made from non-food supply sources do not currently exist and relying on them to meet the future mandate is unlikely. The chart below, from the CBO report, shows exactly how far away we truly are:

Notice even the government believes we’ll barely eke out any gallons of cellulosic biofuels by 2022, let alone the nearly 15 billion gallons mandated.

As for the use of higher ethanol blends in “older” cars, E15 is only approved for use in vehicles built after 2001. According to AAA, 95 percent of automobiles on the road today aren’t designed to run on gasoline that contains more than 10 percent ethanol.

And the CBO is hardly the only governmental organization taking issue with this broken government policy:

  • The Environmental Protection Agency — responsible for implementing the nation’s ethanol policy — has provided evidence that shows ethanol produced 33 percent more emissions in 2012 than gasoline, and could increase GHG emissions by an additional 10 percent by 2017.
  • The Department of Energy has concluded that higher ethanol fuel blends like E85 (gasoline containing 85 percent ethanol by volume) lowers vehicle fuel mileage by 15 to 25 percent than when operating on E10. This means consumers are forced to return to the pump more frequently and at greater cost. 
  • The National Academy of Sciences has demonstrated that high corn and soybean prices, prompted largely by the mandate, are driving one of the worst crop land conversion events in recent US history.
  • The Government Accountability Office is concerned that the largest increases in corn acres for ethanol production are projected to occur in the Northern Plains, which relies on irrigation and is already water-constrained. Parts of the region draw heavily from the Ogallala Aquifer, where water withdrawals for agriculture and other uses are already greater than the natural recharge rate from precipitation.

And yet, the American people are still waiting for action from Washington. Tell your friends and family to support reform of this broken policy.

Friday RFS Roundup – 6/27

What have we learned this week? Even the government has grave concerns about its own ethanol policy. Yesterday, the Congressional Budget Office released a game-changing report stating that, if the EPA fails to act, the policy could cause gas prices to rise up to 9 percent, and diesel prices to rise up to 14 percent.

More from this week:

International Business Times, EPA Biofuel Policy Could Push Up Gas Prices: Congressional Budget Office: As we anxiously await the 2014 mandate levels, the nonpartisan Congressional Budget Office (CBO) reports that if the EPA doesn’t lower the ethanol mandates to meet market demands, gas and food prices could be on a steady incline until 2017. And, to top it off, using ethanol won’t even curb greenhouse gas emissions. In fact, an Environmental Working Group study found that using ethanol actually increases greenhouse gas emissions. 

In Short: “If the EPA doesn’t revise down its 2014 mandates to reflect the shift in driving habits and fuel demand, costs would rise for petroleum refineries and raise gasoline prices by 13 cents per gallon to 26 cents per gallon and diesel prices by 30 cents per gallon to 51 cents per gallon by 2017, according to the CBO’s report released on Thursday. The higher costs would also encourage fuel suppliers to sell higher ethanol blends like 85-percent ethanol fuel. Since about 40 percent of the U.S. corn supply is used to make ethanol, the extent to which the RFS increases corn ethanol demand will raise corn prices by as much as 6 percent along with the prices of foods made with corn, including meat, poultry, dairy products and anything sweetened with corn-syrup, the report says.”

Journal Star, Farm and Food: Betting Against Climate Change: As a Ceres report points out, water scarcity is reaching critical mass and the kind of industrial corn production that ethanol requires is putting our dwindling supplies at risk when we can least afford it.

In Short: “The Ceres report lays out the size of that threat to the U.S. corn sector. For example, “87 percent of irrigated corn is grown in regions with high or extremely high water stress” and “over half of the country’s irrigated corn production — worth nearly $9 billion annually — depends on groundwater from the over-exploited High Plains aquifer. Additionally, “36 ethanol refineries are located in and source corn (that is) irrigated” with that High Plains aquifer. It’s a big investment at big risk, suggests Ceres, which directs a group of more than 100 institutional investors whose collective assets top $13 trillion.”

The Truth about Ethanol and the Renewable Fuel Standard

Friday RFS Roundup – 6/20

When people think of summer, thoughts of the beach, cookouts, family and friends are always top of mind. But this summer, an overwhelming amount of Americans are feeling the burden of ethanol mandates raising the price of summer staples. Since the introduction of the Renewable Fuel Standard in 2005, an annually increasing amount of corn is diverted from food and animal feed to ethanol fuel--making it more and more difficult for ranchers to feed their herds. By increasing the competition for the price of corn, the ethanol mandate has unintentionally been driving up the cost at the grocery store, and by 2022, the RFS will increase food costs for Americans by $3 billion—annually.

Learn more about this trend from this week’s ethanol news:

MarketWatch, Why High Gas Prices Mean High Beef Prices: With nearly 40 percent of the U.S. corn crop diverted to ethanol production, competition between fuel and food is causing increased prices, particularly beef prices. With corn prices at about $4.40 a bushel today – up from $2.00 a bushel when the RFS was first enacted - consumers are seeing this price increase reflected in their grocery store bills.

In Short: “So why do rising gasoline prices hurt more at the checkout line when it’s time to barbecue? One word. Corn. In part you can thank (or blame) the Renewable Fuel Standard (RFS) , which was created by Congress in 2005 and expanded in 2007; it required refiners to blend renewable fuels such as corn-based ethanol with gasoline, starting with 7.5 billion gallons of blended fuels by 2012 and rising to 36 billion by 2022.”

Quartz, You’re Not Crazy, America—Your Grocery Bill is Going up Fast: Economic analyst, Matt Phillips, visualizes how food costs are on the rise and are not projected to lower any time soon. As evident in one of Phillips’ graphs, we see that since the beginning of the Renewable Fuel Standard in 2005, beef prices have dramatically spiked reaching nearly $4.00/pound today.

In Short: “As an economic issue, inflation just isn’t a problem in the US…That said, food has gotten a lot more expensive recent months…The recent price-climb is one of the fastest since 2011, when a spate of bad weather drove up the cost of food commodities such as wheat and corn. High feed costs and drought also seems to be behind some of the current food price spikes.”

The Tennessean, Bad Policies Push up Food, Energy Prices: Money manager and researcher, Thomas Fairfax Landstreet delivers some straight talk on why food prices are rising, and government policy gone awry is to blame. By restricting the supply of food, ethanol mandates leave consumers with the bill for this failed policy.

In Short: “Most observers blame recent droughts for the rise in food prices. But droughts come and go, bad policies like the Renewable Fuels Standard (RFS) don’t. The RFS has diverted 40 percent of the corn crop away from the food supply, leading to scarcity of the world’s largest cash crop. Corn goes into everything from cereals to sodas to cattle feed.”

Friday RFS Roundup – 6/13

Regardless that this week’s news cycle was dominated by political and electoral news, RFS coverage continues on! Between low fuel economy and high food costs, ethanol mandates continue to affect consumers everywhere. Take a look at what we found most profound this week:

Chicago Sun-Times, Chicago Restaurants Fight Rising Food Prices: As food costs are on the rise, Chicago restaurant owners, suppliers and chefs gathered last week to discuss one of the major drivers: the Renewable Fuel Standard (RFS). Dave Samber, owner and chef of Polo Cafe and Catering, and Michael Lapidus, owner of Q BBQ, discuss why these massive price increases demand awareness and action.

In Short: “As the price for a wide variety of basic proteins and other staples increase, restaurants — most often operated by small business owners — struggle to affordably secure the products their menus rely on. Since the implementation of the RFS, wholesale prices for beef have risen 47 percent, dairy by 23 percent, and eggs a walloping 70 percent. In turn, this has increased total costs for full-service restaurants by $691 million or nearly 9 percent according to a recent study by PricewaterhouseCoopers. This burden puts the 517,900 Illinois jobs supported by the food service industry at stake as restaurant owners struggle to keep costs at bay and payrolls flowing.”

Huffington Post, Can Fuel Economy Targets Survive All the Loopholes?: While the Obama administration is committed to policy geared towards cutting greenhouse gas emissions (GHGs) and auto-related pollution nationwide, the policy allows for loopholes that could result in the exact opposite. And one of those loopholes involves ethanol – for every E-85-friendly car this is made, automakers are allowed to increase the number of conventional gas cars they manufacture. Here is the catch: only 2% of the country’s gas stations have E-85 in their pumps, which leads us to ask: who is even going to buy those E-85 friendly cars? With loopholes like this, this failing policy does little for energy efficiency; instead, automakers should only make cars that the markets demands.

In Short: “For each vehicle a company builds that is capable of running on E-85 ethanol (in addition to conventional gasoline,) the automaker can increase the number of gas guzzlers it builds. Never mind that fewer than 2 percent of the country's filling stations sell the corn-based E-85 fuel -- and that few drivers buy a drop of it.”

WBIR, Drought Can Drive up Food Prices in East TN: In East TN, consumers are seeing an increase in basic food prices caused by the area’s lack of rain. As the drought continues, people are beginning to change their eating habits and cut back on basic foods. Do you know a major cause of U.S. droughts? Ethanol mandates.

In Short: “Dena Wise with the University of Tennessee Extension said that recent price rises could be a good reason to shop smarter. ‘Food is a necessity and really over the last several years, middle to low income families, those who have the tightest budgets, have had very little increase in incomes. So that makes it particularly important to buy food intelligently just like they spend the rest of their money intelligently,’ said Wise. This could include looking for substitutes for your everyday meats and looking for other protein replacements.”

What Can Chicago Restaurants Agree On?

How often do Chicago’s competing restaurants, chefs and food suppliers agree on something? Not often, unless it involves ethanol mandates…

Last week, Smarter Fuel Future and the Illinois Restaurant Association hosted a media event at 437 Rush, in which local Chicago restaurants, chefs and suppliers discussed the challenges caused by the policy. Joe Roireau, Executive Chef of 437 Rush, DaveSamber, owner and chef of Polo Café and Catering and Ron Lenzi, owner of Erie Café, discussed how driving up the price of corn, the main feedstock for cattle and beef production, results in rising prices that impact the cost of food at restaurants.

Samber was particularly outspoken about the ways in which restaurants are paying the price for this failed experiment.  Addressing an audience of 40 local business leaders and media, Samber asked, “How do you pass these huge product increases on to your customers?” His answer: “You don’t.” Because if you did, customers would go away. Samber, along with the other speakers, stressed the importance of the EPA’s proposal to reduce the 2014 ethanol mandates and the need for government help in lowering the cost of food.

In the video below, see who joined our speakers in sharing their grievances with the RFS. Join them, and click here to share how #EthanolFailed you.