After another Congressional debate on the merits of the RFS, this time in the House Committee on Science, Space and Technology, the conclusion reached was the same. However well-intentioned the RFS was – and that is debatable – it has had significant unintended consequences and Congress must act.

The first consequence is the increase in food prices. Chain restaurant owner Ed Anderson told the hearing that according to a PwC study, the RFS costs chain restaurants $3.2 billion in higher food commodity costs each year, due to the mandate’s impact on food prices. Mr Anderson added that it cost him an extra $374,000 each year for his restaurants alone.

The second unintended consequence is the environmental impact. University of Michigan Energy Institute research professor Dr John DeCicco told the hearing that not only was science used in forming RFS policy wrong, but corn ethanol can produce up to 70 percent more greenhouse gas emissions than regular gasoline.

A final consequence is the effect on the consumer. As Charles Drevna of the Institute for Energy Research (and formerly of AFPM) told the committee, the assumptions policymakers made when drawing up the RFS have turned out to be entirely wrong. The belief that the U.S. was resource-scarce has been shattered by the shale revolution. Far from increasing as expected, gasoline usage has fallen, and despite numerous assurances by the biofuels industry, cheap, scalable and plentiful biofuel has yet to materialize.

As Mr Drevna said in his testimony, “What is clear is that neither government nor the EPA can mandate innovation.” Government needs to get out of the way so energy companies can do what they do best: provide an affordable and plentiful fuel supply to the U.S. consumer. The only way Congress can do that is by repealing the RFS.

AFPM Communications

Posted by AFPM Communications

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