Oddfellows at the Office of Management and Budget

September 23, 2014

Autumn is upon us, and the final numbers for the Renewable Fuel Standard – America’s ethanol mandate – for this year are still in the hands of the Administration, a problem for everyone from consumers to refiners and even ethanol producers.

Now that the rule has moved from the Environmental Protection Agency to the Office of Management and Budget, its final hurdle, many of the Smarter Fuel Future coalition have come together to discuss the wide-ranging consequences of the policy.

In addition to discussing individual concerns, the coalition presented OMB with a petition from nearly 13,000 SFF advocates calling for a lowered ethanol mandate.

Here’s what they had to say:

Emily S. Cassidy, Environmental Working Group:

Environmental Working Group supports EPA's proposed RVO, to reduce corn ethanol by 1.39 billion gallons. Implementing the proposed RVO would have the same carbon reduction benefit as taking 580,000 cars off the road for one year. By holding firm, the OMB can send a powerful signal to investors to support the development of second generation fuels that actually reduce greenhouse gas emissions.

Nicole Wood, Boat US

We represent recreational boaters, not the marine industry, so we have a uniquely consumer end-user perspective. We commend EPA for addressing the current-day reality of our nation’s shrinking gasoline appetite. If we can reduce the pressure on gasoline to absorb unsafe levels of ethanol blends, we can greatly reduce unforeseen consumer safety issues. And for us at Boat US, keeping the mandate at a safe level is a clear issue of consumer safety.

Marlo Lewis, Competitive Enterprise Institute

Ever since EPA, in November 2013, proposed to cut back the 2014 RFS blending target from 18.15 billion gallons to 15.21 billion gallons, the agency has come under relentless pressure from the corn-ethanol lobby to withdraw the proposal.

Hints from EPA officials indicate the agency is in retreat. That is unfortunate. The existing 18.15 billion gallon target would compel refiners to buy billions of gallons more ethanol than can actually be sold as E10 (the highest blend compatible with today's fueling infrastructure, manufacturer liability and warranty policies, and consumer acceptance).

Refiners would either have to buy what they can’t sell or pay heavy fines and exorbitant prices for blender credits (RINs). Most of those costs would be passed on to consumers at the gas pump.

The political pressure on EPA to breach the blend wall – and the consequent peril to consumers – will only increase over time as RFS statutory targets ratchet up to 36 billion gallons in 2022.

Lukas Ross, Friends of the Earth

This weekend I joined with over 300,000 people in New York City to demand action on climate change.  People came together from all over the country, and all over the world to make their voices heard.  Meeting the challenge of climate change means doing everything possible, as quickly as possible, to lower emissions. Time and speed are of the essence.  Lowering the volumes for corn ethanol—a fuel that remains dirtier than gasoline by the EPA’s own analysis—is an important place to start.

Using corn ethanol now means more climate-disrupting emissions in the short term, precisely when the greatest reductions are necessary.

Nan Smith, National Taxpayers Union

For a regulatory policy to draw the concerned attention of a wide and diverse variety of groups and citizens, it truly must be a failure on many different levels. The Renewable Fuel Standard (RFS) has proved to be such a failure, as its long list of unintended consequences ranges from impacting the price of fuel at the pump to food cost volatility.

Raising the renewable volume mandate during this time of slow-economic recovery and ongoing high unemployment would create undue stress on families and businesses without any substantive environmental benefit. OMB should approve a rule at or below the EPA’s proposed volumes giving Congress time to revisit the underlying legislation, rather than expose countless millions to more unintended consequences.

Kristin Sundell, Action Aid

At ActionAid, we’re already seeing the impact of US biofuel mandates in the countries where we work. The effects are twofold – direct increases in food prices as a result of food crops such as corn being used for fuel, and communities being pushed off their land to make way for biofuels plantations, losing their sources of food and income in the process.

Since the RFS was implemented, we have seen massive spikes in global food prices.  In 2008, the number of hungry people reached almost 1 billion. In 2012, we saw the highest corn prices in history. A number of factors led to these spikes, but artificially high and inflexible demand for biofuels was a significant contributor. Between a quarter and a third of recent increases in global grain prices is estimated to have resulted from biofuel expansion. Between 2005 and 2011, U.S. corn ethanol mandates alone were responsible for $6.6 billion in additional corn import costs for developing countries.  Across the African continent, the cost to some of the most food–insecure countries in the world was $1.6 billion.   

We therefore strongly support reducing the Renewable Volume Obligations for food-based biofuels within the RFS.

Former Senator Wayne Allard, American Motorcyclist Association

We support the realistic change in Renewable Fuel Standard and Renewable Volume Obligations for ethanol proposed by the EPA last fall. We oppose any attempt by the administration to backtrack from the EPA’s position for a number of reasons, and are very concerned when we hear that the EPA may change course and recommend a higher standard for 2014.

If the EPA reverses its position, the market will be forced to absorb larger supplies of fuels with ethanol blends in excess of 10 percent. The proliferation of these higher ethanol fuels, such as E15, creates a practical and a legal hazard for the estimated 11 million motorcycles currently in operation. No motorcycle on the road today has EPA approval to use fuel with more than 10 percent ethanol. If a motorcyclist should happen to inadvertently use E15 – a strong possibility given the confusing labeling and lax EPA enforcement – the action would void the vehicle warranty and place the motorcyclist in violation of federal law.

If you’ve felt the pain of this failing policy, join us in calling for long-term, Congressional action to reform the ethanol mandate.