Experts Outline Costs of RFS

March 29, 2013

This week, National Journal’s Amy Harder of the asked experts to share their thoughts on the Renewable Fuel Standard (RFS)— “Defend, Revisit or Repeal.”  The majority of responses argue that the RFS is not working. Below are some of the noteworthy responses:

  • “Many of the solutions proposed to free America from its dependence on oil—like more home-grown biofuels—are well-intentioned but ultimately harmful and simply unnecessary.” Janet Larsen, Director of Research, Earth Policy Institute
  • “While the intent was noble, the legislation has failed to live up to original expectations, and is having numerous unintended consequences, including higher food prices for consumers. Meeting the RFS mandates is not possible today, and meeting the scheduled increase in mandates will not be attainable in future years. It is time for a major overhaul of the Renewable Fuel Standard to match market realities.” Bill Lapp, President, Advanced Economic Solutions
  • “The Renewable Fuel Standard is a broken policy that must be repealed…America’s petroleum refiners – our members – support a sensible and workable integration of biofuels into the marketplace. However, a government mandate that sets aside free market principles introduces more problems than it solves.” Charles Drevna, President, American Fuel and Petrochemicals Manufacturers
  • “Thanks to an unworkable federal energy policy, prices for animal feed continue to soar, burdening those farmers and ranchers that raise livestock and poultry and the companies that process them with rising production costs. In addition to forcing farms and food producers to cut jobs or close their doors, the increased costs are reflected in the expanding grocery bills of every American, at a time when 46 million live below the poverty line.

    The Renewable Fuel Standard is turning more and more of our nation’s corn crop into fuel, with disastrous effects.

    By mandating that all U.S. transportation fuel contain ethanol, the RFS guarantees massive demand for corn — a primary ethanol feedstock — pushing up prices of the grain by an astronomical 275 percent since the policy went into effect in 2006.” Mike Brown, President, National Chicken Council

  • “Congress should repeal the Renewable Fuel Standard. The RFS was based on three key and ultimately flawed premises—a belief that the United States is running out of oil, that ethanol was a new and novel fuel that could become cost-effective with a little push from the federal government, and that ethanol would obviously reduce greenhouse gas emissions. All of these premises have been shown to be wrong. Worse, the RFS now increases the cost of food and fuel.” Daniel Simmons, Director of Regulatory and State Affairs, IER
  • “One of the consequences of the RFS mandate has been to divert corn and grain production from food production and feedstock use. This has led to corn and grain based food products being more expensive. The trickle-down effect of higher food prices is especially harmful to people living in developing countries where corn and grain products are basic food staples. Using food meant for the malnourished as a trade-off for enriching special interests should be a source a shame. It is unfortunate that it isn’t.

    There is only one course of action regarding the RFS: junk it!” William O'Keefe, CEO, George C. Marshall Institute

  • “Congress should eliminate all fuel mandates and subsidies. They harm the environment, consumers, and taxpayers, discourage innovation, and encouraging political rent-seeking.” Susan Dudley, Director, George Washington University Regulatory Studies Center
  • “The sooner that Congress enacts legislation phasing out the RFS, the better it will be for just about everybody.” Michael Canes, Distinguished Fellow, LMI