The summer driving season just kicked off with the lowest Memorial Day gas prices since 2005, and AAA says American drivers have saved more than $15 billion this year.
It’s good to be the world’s leading oil and natural gas producer. But an obsolete law passed before the U.S. energy resurgence could interfere. The Renewable Fuel Standard forces increasing volumes of ethanol into the national fuel supply each year, regardless of demand. Volume proposals recently announced by the Environmental Protection Agency would add 700 million gallons of ethanol and other biofuels into the nation’s fuel supply in 2017, potentially pushing higher ethanol blends like E15 into the marketplace.
E15 gasoline contains 15 percent ethanol. It could be costly. About 90 percent of vehicles on the road today were not designed to use E15. Extensive testing shows that E15 can cause damage to engines and fuel systems not covered by warranty.
Higher ethanol content can also damage boats, classic cars, motorcycles, lawnmowers and power equipment. Consumer groups advise lower ethanol blends for these engines, but access to the ethanol-free fuel many owners demand is jeopardized by ever-increasing ethanol volume requirements.
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The problem could be even worse in Missouri if Senate Bill 657 is implemented. This misguided policy would make Missouri the only state that would put 100 percent of the liability for damages from any legally approved petroleum product on consumers.
Also, continuing to increase ethanol volumes could drive up prices at the pump — by 26 cents per gallon, according to the Congressional Budget Office.
The flawed policy is already affecting food costs, prompting anti-hunger organizations, grocers, restaurant associations and producers of poultry, pork and beef to speak out. By diverting nearly 40 percent of the U.S. corn crop from food to fuel, the ethanol mandate has contributed to a 25 percent increase in the consumer price index for food since 2005.
For poultry producers, that means $53 billion in higher actual feed costs, says the National Chicken Council. Council President Mike Brown said the EPA’s 2017 ethanol volume proposal “ensures that the chicken industry, as well as all of animal agriculture, remains only one flood, freeze or drought away from another crisis.”
A Wendy’s franchise owner in Virginia stated: “The corn ethanol mandate, or RFS, is costing my small company up to $34,000 more in higher food costs per restaurant, each and every year. For our family business, that’s approximately $374,000 a year in additional costs.”
The Renewable Fuel Standard is a broken policy that has been rendered obsolete by the American energy revolution. Increases in domestic production have helped drive down energy imports, fuel costs and, through greater use of clean-burning natural gas, greenhouse gas emissions.
Democrats and Republicans agree the fuel standard is a failure, and polls show voters are concerned about the effects. We’ve had 10 years to evaluate the fuel standard in action, and the evidence is overwhelming. It’s time to repeal or significantly reform this outdated, failed policy.
Ryan Rowden of Jefferson City is executive director of the Missouri Petroleum Council.