Friday, November 21 was a difficult day for EPA. Simply put, it decided not to decide on an issue that really required a decision. Confused? You’re not the only one: everyone – from the oil and gas industries, to the biofuels organizations –  was up in arms and utterly bemused by EPA’s actions.

This confusion has not only lasted all of this year, but also for all of 2013. With regards to the 2013 RFS, EPA did not issue a final rule until August 15, 2013: more than 8 months after the statutory deadline and nearly two-thirds of the way through the compliance year. As AFPM noted in a recent letter to EPA, these inexplicable delays are in clear violation of the Clean Air Act, and are causing additional harm to everyone concerned.

At the root of EPA’s confusing decision to not make a decision, is its attempts to repair a policy that is clearly irreparable. To begin, the RFS was introduced at a time when energy independence for the U.S. was considered to be a pipe dream, but the fracking revolution has turned that justification for the RFS on its head.

Furthermore, at the time of the policy’s implementation, the government also thought transportation fuel consumption was going to increase year-on-year, but this justification has proven to be incorrect as demand leveled off after 2007. In the seven years since the RFS was introduced, Americans have started buying more fuel-efficient vehicles and driving less. 

Apart from the two major justifications for the introduction of the RFS proving to be false, the side-effects of the policy have also been harmful not only domestically, but also globally. Prices of groceries have risen as a result of the RFS diverting significant corn resources towards ethanol production instead of food production, regardless of demand or market forces. Meat prices in the US, for example, have risen due to the rising price of feed, and corn tortilla prices in Central American countries like Guatemala have almost doubled.

So EPA’s decision to kick the can down the road helps nobody, and leaves everyone in a state of confusion. Gasoline refineries have to keep on guessing how much ethanol to use this year (and next year, it seems), members of food and restaurant associations have to continue to work with a policy they describe as “broken” and “insane,” and the volatility and uncertainty of whether or not the RFS targets will be set continues to leave a variety of industries in a state of uncertainty – and unable to plan and budget effectively.

AFPM Communications

Posted by AFPM Communications

AFPM Communications provides insights from inside AFPM. To learn more about AFPM, visit AFPM.org.