The Environmental Protection Agency is unilaterally reducing Renewable Fuel Standard mandates and effectively admitting congressional projections were far off base, but the government is pouring even more money into efforts to keep biofuels afloat.
On June 10, the Environmental Protection Agency, or EPA, announced it was increasing the amount of renewable fuels that must be blended into America’s fuel in the coming years, but the levels are a reduction compared to the mandates approved by Congress last decade.
“The EPA, in typical regulatory fashion, is kind of redrawing the law on itself to reduce the amount,” said Tom Borelli, a senior fellow at Freedom Works who recently wrote about the EPA actions.
The decision is drawing howls of protest from the biofuels industry, traditional energy companies and free-market advocates, with the latter saying reality proves government mandates are almost always a terrible idea.
“Government command and control policies fail,” Borelli said. “They fail every time. The free market should decide the type of fuel that we use. Industry is smart enough to figure a way.”
Meanwhile, Borelli said the biofuels industry is furious that the government is shaving back on its original promises.
“The biofuels industry is really upset, and to a certain extent they should be, because they were making investments based on what Congress said they would be forcing into the fuel supplies,” he said. “So if you’re a biofuels company, you thought you had a certain amount of demand every year and now the EPA said, ‘Nah, we don’t need all that much.'”
Listen to the WND/Radio America interview with Tom Borelli:
But while the EPA is slowing the increase of biofuel increases to the fuel supply, the percentage is still outpacing gasoline consumption. That means car makers and the traditional energy industry are looking at big problems.
“When you do the percentages, now we’re hitting what they call the ‘blend wall,'” Borelli said. “You’d be over 10 percent ethanol, for example, in the gasoline supply. That would be destructive for a number of car engines as well as the energy infrastructure that the oil industry has.”
The mandate dilemma extends back a decade to the Energy Policy Act of 2005 and Energy Independence and Security Act of 2007. President George W. Bush signed both, the first in collaboration with the Republican-led Congress. Democrats were in the majority when the second bill was passed.
“President Bush and Congress were concerned about the amount of oil we were importing from foreign nations,” Borelli said. “They thought it would be a grand idea if the federal government could step in and force the introduction of renewable fuels into our gasoline and diesel supplier transportation fuels.”
But the congressional micromanaging was just getting started.
“In its infinite wisdom, Congress set out very specific targets of the billions of gallons of these sorts of renewable fuels that would have to be blended into our transportation fuels going all the way out until 2022,” Borelli said.
With the numbers not quite working out as planned, the Department of Agriculture is trying to keep the biofuels flowing. It vows to spend $100 million on new pumps that can handle a higher percentage of ethanol in our fuels.
“A hundred million dollars is not a lot of money in terms of the energy infrastructure. Essentially, I think we just threw a hundred million dollars away,” said Borelli, who says there is a lot of money involved in keeping ethanol and other biofuels afloat.
“The farming lobby is huge,” he said. “The biofuels industry can only survive by lobbying, right? It’s only through government mandates that these companies can survive. So there’s a lot of money going in to support this failed program.”
Borelli said the Renewable Fuel Standard is a perfect example of what happens when politicians and bureaucrats try to dictate the future. He said the Bush administration did not foresee the fracking boom or the pace at which consumption and other technological advancements would proceed.
“They couldn’t predict technology in terms of ethanol production, especially from cellulosic ethanol,” Borelli said. “And they certainly couldn’t project the fact that technology would allow the United States to be the leader in fossil fuel development. So the government should just clearly stay out of the free market.”