A few groups with military ties have surfaced recently in Iowa to voice their support for the Renewable Fuel Standard and for the statutory volumes of ethanol. They believe that mandating US consumption of renewable fuels is a national security issue and that EPA should require the highest volume allowed by law (and in Iowa “renewable” means “ethanol”).
The belief that the RFS is national security issue is based on the fact that the US imports a significant amount of petroleum from other countries which then makes the US vulnerable to other countries (or cartels) manipulating supplies so that the US could become starved for energy supplies. This is rooted in our actual experience from the 1970s so it appears to be a logical conclusion.
I can understand the allure of energy independence: No more entanglements with the volatile Middle East, no dependence on trading partners, and no vulnerability to energy supply extortion. But that does raise some geopolitical questions: Even if the US disengages from global energy markets, does that mean that the US would ignore a disruption in the global market that affects our allies in the Middle East, Europe, and Japan? Is disengagement even desirable?
For now, let’s concede that renewable fuels is a national security issue and energy independence is desirable.
The next set of questions then need to pin down what “energy independence” means. Does the US have to use fuels produced only in the US? No imports, even from friendly nations? Are we less independent if we import four MMbpd of petroleum from Canada and Mexico (combined)? If we exclude petroleum imports from friendly nations do we have to exclude renewable fuels imports like the advanced biofuels that we import from Brazil or are those okay?
We’re not like insects trapped in amber. Things have changed since the 1970s. “In 2014, about 27 percent of the petroleum consumed by the United States was imported from foreign countries, the lowest level since 1985.” With most of that coming from North American friends you could conclude that the US has already drastically reduced the risk of being energy starved.
For now, let’s concede that energy independence is desirable and that the US is not quite there yet.
The next question is whether or not the RFS helps the US attain energy independence. RFS-mandated ethanol has been one factor contributing to the reduction in US petroleum gasoline consumption by about 7 percent in its eight years of existence. However, the RFS-related reduction in petroleum imports is small compared to the reduction that has been realized over the past four years due to innovations in oil production technologies. The US has increased crude oil production by four million bpd compared to ethanol’s contribution of approximately 0.6 million bpd. So the answer to the RFS question is that there are more effective ways to achieve energy independence.
Given our national security needs and desire for energy independence, the RFS’ small contribution should be considered a failure when compared to the benefits that have followed from the development of petroleum resources within our borders.