The Obama administration strongly supports biofuel mandates and opposes any legislation that would return transportation fuel choice to the states or the people, said Secretary of Agriculture Tom Vilsack in a speech to ethanol producers.
Vilsack Blasts Congress
In a September speech sponsored by the ethanol industry, Vilsack blasted efforts in Congress to amend the 2007 statute that forces consumers to purchase biofuels and ethanol-blended gasoline. Under the law—passed by a Democrat-controlled Congress and signed by Republican President George W. Bush—refiners are required to blend biofuels into the nation’s motor fuel supply in greater quantities every year, with the mandate reaching 36 billion gallons a year by 2022.
More than half that amount, or 21 billion gallons, is required to come from what are called “next-generation fuels” that do not use corn starch as a feedstock.
“There is no need for Congress to intervene in this,” Vilsack said. “There is no need for Congress to try to rewrite this renewable fuels standard. They got it right the first time.”
Mandates Face Wide Opposition
Whether Congress “got it right the first time,” as Vilsack says, is at the center of an intense debate. Opponents of the renewable fuel mandates, which include environmentalist groups, livestock producers, automobile associations, and consumer advocates, point out the mandate diverts 40 percent of the nation’s corn crop away from feeding people and livestock. This in turn drives up food prices and induces farmers to develop marginal cropland that would otherwise be left in its natural state. The ethanol itself, moreover, delivers fewer miles per gallon and fewer miles per dollar than gasoline.
Adding to the ethanol controversy, the U.S. Environmental Protection Agency recently approved the sale at fueling stations of gasoline containing 15 percent ethanol as conventional gasoline, up from the former 10 percent cap. Automotive engineers warn the higher blend of ethanol will make fuel substantially more corrosive and will increase damage to vehicles.
“If the EPA continues to dictate unrealistic levels of ethanol that fail to recognize declines in gasoline consumption, one of two scenarios will occur. Refiners will either be forced to raise the price of gasoline to pay fines to the EPA, or they will be forced to export raw gasoline in order to make a profit, leaving a massive shortage of gasoline here at home,” U.S. Sen. James Inhofe (R-OK), senior member of the Senate Environment and Public Works Committee, noted in an open letter published on his website.
EPA Requires Nonexistent Product
A further problem arises with cellulosic ethanol mandates imposed by EPA. Contrary to the expectations of lawmakers in 2007, fuel made from switchgrass, corn stover, wood chips, and other materials remains commercially unviable. Nevertheless, EPA is using its discretion under the law to tell refiners they must use cellulosic ethanol that, for all practical purposes, does not exist. EPA is targeting refiners with steep fines for not blending the nonexistent cellulosic ethanol into gasoline.
An Oil Industry Conspiracy?
Unmoved by such arguments, Vilsack told the ethanol producers the oil industry wants biofuel manufacturers to fail so they can buy up the ethanol plants. He said the oil industry is conspiring with its allies to block the U.S. Department of Agriculture from funding the installation of pumps at gas stations capable of blending higher levels of ethanol into gasoline.
House Takes Action
On Capitol Hill, where the biofuel mandates originated, members of the House Energy & Commerce Committee are drafting an amendment to address the problems that have surfaced with the biofuels mandate. House leaders plan on conducting hearings on the topic later this year. Vilsack’s comments, however, strongly suggest any legislative revision of the biofuels mandate would face a near-certain presidential veto.
“The biofuel mandates subsidize the U.S. corn farmer at the expense of livestock producers and American consumers,” said Daniel Simmons, director of state policy at the Institute for Energy Research.
“It is a disgrace that Secretary Vilsack supports policies that drive up food and fuel prices in exchange for subsidies for special-interest groups,” Simmons added.
Bonner R. Cohen, Ph. D. ([email protected]), is a senior fellow at the National Center for Public Policy Research.