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Tallahassee Democrat: Ned Bowman: Ethanol mandate is hurting consumers
Friday, November 22, 2013
The Florida Chamber of Commerce recently announced that our state’s economy grew by more than $30 billion last year, adding nearly 131,500 much-needed jobs after a rough couple of years.
The good news is that Florida could be poised for more growth and economic success in the coming years with the right policies in place. The bad news? Federal mandates like the Renewable Fuel Standard (RFS) stand in the path of this anticipated growth and continue to harm many aspects of our economy as reform remains elusive.
In theory, the RFS was implemented in 2005 to counter rising gasoline demand and foreign imports by requiring that increasing amounts of biofuels — mostly in the form of corn-based ethanol — be blended into the U.S. gasoline supply. In practice, the mandate has done little to ensure U.S. energy security, and it has harmed our economy as it continuously undercuts consumers’ bottom line.
In order to meet the RFS’ rising blending requirements, the United States is now forced to use 40 percent of its corn crop for ethanol production — a move that has caused corn prices to rise 27 percent since the mandate was aggressively revised in 2007.
As the RFS pits food producers against fuel producers vying for increasingly expensive corn, rising costs have trickled down to consumers. Since the RFS was expanded in 2007, prices for cereal and bakery products in the United States have risen 77 percent, while prices for meat, poultry, fish and eggs have increased 78 percent. All together, the average U.S. family of four faced a $2,000 increase in food costs last year due to the effects of higher corn prices brought on largely by the RFS. And higher food costs are just the beginning of the RFS’ harmful effects.
Rising blending levels have brought U.S. refineries to their knees, as the RFS forces refiners to either blend unsafe amounts of ethanol into our gasoline supply or buy costly compliance credits known as Renewable Identification Numbers (RINs) that are riddled with fraud and can cost local companies more than a refinery itself. To make matters worse, increased costs are passed on to consumers, who are forced to buy more expensive gasoline with lower energy content (ethanol contains 33 percent less energy than regular gasoline). Because of this, visits to the gas station will become more frequent and costly.
Perhaps the most frustrating aspect of this mandate is that, while it was enacted to curb rising greenhouse gas emissions, research has shown that the production of ethanol and other biofuels will result in higher emission levels across the production life cycle. According to a recent study by the National Research Council, the production and use of ethanol triggers the release of harmful air pollutants such as sulfur oxide and ozone at higher levels than petroleum-based fuels.
Florida’s leaders understand the harmful consequences of unfettered biofuel blending levels and recently worked together to repeal the state’s version of the RFS. Our leaders in Washington should follow in Florida’s footsteps and put an end to this policy that threatens American businesses and consumers. It’s time Congress work toward regulations that consider the diverse needs of industries throughout the state and enact policies that help move America forward, not hold us back.
Ned Bowman is the executive director of Florida Petroleum Marketers and Convenience Store Association (http://www.fpma.org).