How Much Are You Prepared to Pay For a Non-Existent Product?

April 7, 2014

As the most promising advanced biofuels producer in the U.S. narrowly escapes bankruptcy — again — the Senate is considering a plan to continue subsidizing the nonexistent fuel.

On Thursday, April 3, a bill known as the EXPIRE Act made its way out of the Senate Finance Committee. If passed, the EXPIRE Act would renew a slew of energy tax credits slated to expire, including the extension of the $1.01 tax credit for any cellulosic biofuel produced through 2015 — a measure that could cost taxpayers another $55 million.

The problem here remains the inability of advanced biofuels companies, like KiOR — the aforementioned near-failed company — to actually bring those fuels to market.

This chart compares the level of advanced biofuels the EPA expected (and mandated) be produced and the reality of the current market. There isn’t enough production for consumers to actually notice, let alone meet the mandate, and yet the ongoing cost of supporting the biofuel industry through mandates and subsidies is estimated at almost $160 billion from 2008 to 2022.

Gina McCarthy, EPA Administrator, said in a hearing on March 27, the “goal of the Renewable Fuel Standard” is “to get to advanced and cellulosic.” Yet, according to government Energy Information Administration, as far out as 2040 it is unlikely that we’ll be anywhere close to the mandated level of cellulosics.

That’s right, even the government predicts we won’t be able to meet the government’s own mandate. That makes sense.

With advanced biofuel producers on the brink of complete failure, the real winners of the Renewable Fuel Standard (RFS) are land-grabbing corn ethanol producers who continue to rake in record-high profits at the expense of American consumers. Despite being widely discredited as an environmentally-friendly fuel, corn ethanol continues to meet more than 80 percent of the RFS mandate.

Unfortunately, the technology simply does not yet exist to produce the amounts of advanced biofuels needed in today’s market and continuing to mandate ethanol production is driving us farther away from our goals.

Tell McCarthy and the EPA: lower the mandate and stop protecting dirty corn.