Friday, March 13, 2015
U.S. Sens. Pat Toomey (R-Pa.) and Dianne Feinstein (D-Calif.) are working to repeal a law they assert drives up the cost of everything from gasoline to groceries. The Toomey-Feinstein Corn Ethanol Mandate Elimination Act of 2015, introduced Feb. 26, abolishes the corn ethanol mandate in the Renewable Fuel Standard (RFS).
The RFS requires annual increases in the amount of renewable fuel that must be blended into the total volume of gasoline refined and consumed in the U.S. However, the current statute effectively mandates the use of corn ethanol to the exclusion of other fuels. Bill sponsors maintain the requirement drives up the price of corn, products made from corn, livestock that feeds on corn, and many products on grocers’ shelves.
“The RFS requires fuel suppliers to blend millions of gallons of biofuels—most often corn ethanol—into the nation’s gasoline supplies. It drives up gas prices, increases food costs, damages car engines, and is harmful to the environment,” Toomey said. “Under government mandates, refiners—such as ours in Trainer, Pennsylvania—are forced to make a choice: increase the ethanol content in their fuel blends or pay a penalty by purchasing credits from energy traders. Once again, this is the government using corporate welfare to shower money on a favored industry and then send the bill to the general public.”
The Renewable Fuel Standard, first enacted in 2005, required refiners and blenders to use 18.15 billion gallons of renewable fuel in 2014. More than 14 billion gallons of this total will be met by the use of corn ethanol, a level that will increase in subsequent years. There are two key problems with continuing to mandate the consumption of more and more corn ethanol each year. About 40% of the U.S. corn crop is now used to produce ethanol, artificially inflating food and feed prices. In addition, as gasoline consumption declines, refiners face a “blend wall” when the RFS mandate exceeds the limit at which ethanol can be blended into the fuel supply, determined to be at 10% of total gasoline consumption.
“The federal mandate for corn ethanol is both unwise and unworkable,” said Feinstein. “A significant amount of U.S. corn is currently used for fuel. If the mandate continues to expand toward full implementation, the price of corn will increase. According to the Congressional Budget Office, that would mean as much as $3.5 billion a year in increased food costs.” The senator noted that U.S. infrastructure has a ceiling for the amount of corn ethanol that can be used, and the ceiling is rapidly approaching. “Companies are physically unable to blend more corn ethanol into gasoline without causing problems for many gas stations and older automobiles.”
The RFS requires annual increases in the amount of renewable fuel that must be blended into the total volume of gasoline refined and consumed in the U.S. However, the current statute effectively mandates the use of corn ethanol to the exclusion of other fuels. Bill sponsors maintain the requirement drives up the price of corn, products made from corn, livestock that feeds on corn, and many products on grocers’ shelves.
“The RFS requires fuel suppliers to blend millions of gallons of biofuels—most often corn ethanol—into the nation’s gasoline supplies. It drives up gas prices, increases food costs, damages car engines, and is harmful to the environment,” Toomey said. “Under government mandates, refiners—such as ours in Trainer, Pennsylvania—are forced to make a choice: increase the ethanol content in their fuel blends or pay a penalty by purchasing credits from energy traders. Once again, this is the government using corporate welfare to shower money on a favored industry and then send the bill to the general public.”
The Renewable Fuel Standard, first enacted in 2005, required refiners and blenders to use 18.15 billion gallons of renewable fuel in 2014. More than 14 billion gallons of this total will be met by the use of corn ethanol, a level that will increase in subsequent years. There are two key problems with continuing to mandate the consumption of more and more corn ethanol each year. About 40% of the U.S. corn crop is now used to produce ethanol, artificially inflating food and feed prices. In addition, as gasoline consumption declines, refiners face a “blend wall” when the RFS mandate exceeds the limit at which ethanol can be blended into the fuel supply, determined to be at 10% of total gasoline consumption.
“The federal mandate for corn ethanol is both unwise and unworkable,” said Feinstein. “A significant amount of U.S. corn is currently used for fuel. If the mandate continues to expand toward full implementation, the price of corn will increase. According to the Congressional Budget Office, that would mean as much as $3.5 billion a year in increased food costs.” The senator noted that U.S. infrastructure has a ceiling for the amount of corn ethanol that can be used, and the ceiling is rapidly approaching. “Companies are physically unable to blend more corn ethanol into gasoline without causing problems for many gas stations and older automobiles.”
