Client News
Sunshine State News: Good Reason to Get Rid of Renewable Fuel Standards
Monday, June 24, 2013
By Charles Rooney
Rainey Cawthon has been in the fuel distribution business since 1948. Lots of things have changed in our industry over the last 65 years.
Self-service has replaced full service at the gas station, unleaded gas has replaced leaded, and gas stations themselves have turned into convenience stores.
The oil embargo back in the late 1970s led to shortages and long lines at the pump, and that got people thinking about alternative fuels as a way of protecting ourselves against disruptions in the petroleum market.
Federal renewable fuel standards were established to encourage the blending of ethanol with gasoline, and E10 (gasoline with 10 percent ethanol blended in) entered the distribution system.
That may have made sense at the time, but the argument for ethanol blends like E10 – much less E15 and E85 – has lost much of its persuasiveness with dramatic new developments in our domestic energy outlook: enormous newly discovered reserves of crude oil and natural gas here in the U.S. and in Canada, new techniques like fracking, declining demand for gasoline, etc.
There are also inherent problems with higher ethanol-content blends like E15 that have lower fuel economy and can potentially damage engines and fuel pumps. According to a recent NERA study, if introduced as planned, E15 is projected to increase U.S. gasoline costs by 30 percent over the next two years – and diesel by as much as 300 percent.
Just last month, Gov. Rick Scott signed into law a bill that repeals the state Renewable Fuel Standard (RFS). Although largely symbolic given that the federal mandates remain intact, this sends a strong signal to Washington, D.C., that states such as our own don’t need unnecessary regulations that hurt the businesses driving our economy.
You don’t have to be an economist to understand the devastating impact that will have on our gross domestic product. We’re talking hundreds of billions of dollars in lost value for American goods and services.
If that’s not a good reason for supporting the Renewable Fuel Standards (RFS) Elimination Act of 2013, I don’t know what is.