Although it was created with the best of intentions, the federal government’s Renewable Fuel Standard (RFS) program has become one of the worst and most costly boondoggles ever foisted on the American public.
Its goal was to reduce American dependence on foreign oil and incentivize the fledging renewable fuel industry. But in the hands of the Obama Administration’s Environmental Protection Agency (EPA), it has become a nightmarish mess of out-of-control mandates, over-the-top bureaucracy, and out-and-out fraud.
The RFS was launched in 2005 to ensure that renewable fuels were blended into the nation’s motor vehicle fuel supply. In 2007, RFS2 raised the requirements for specific annual volumes of renewable fuels such as corn-based ethanol and included new mandates for cellulosic ethanol, biomass-based diesel, and advanced biofuel.
The standard also allows refiners or fuel importers to sell or purchase renewable fuel trading credits called RINs (Renewable Identification Numbers), giving them the means to demonstrate their compliance with the volume requirements.
Representatives from the oil industry worked with Congress to write the RFS legislation and agreed with it in concept. But several unforeseen issues have developed. And although fuel providers have repeatedly pointed out the RFS’s flaws, EPA has turned a deaf ear and shown no interest in fixing the convoluted, market-distorting problems.
First, there is the mandate requiring ethanol to be blended in to the nation’s gasoline supply. A total of 13.2 billion gallons of ethanol must be added this year and 13.8 billion gallons next year. Combined with this summer’s drought, the ethanol mandate has pushed up corn and animal-feed prices, resulting in higher prices for food.
Stanford University’s Center for Food Security and the Environment says the RFS has “reshaped price and supply dynamics in food markets” and created hardships for Americans and other people around the globe. “Poor households in the developing world, where 70-80% of the budget is spent on food, will be hurt the most,” the Center says. Yet EPA in November refused to grant a waiver which could have reduced the amount of corn burned for fuel.