Congress Should Repeal the RFS, Not Strengthen It

Several Senators, led by Iowa Senator Chuck Grassley, recently signed a letter urging the Environmental Protection Agency to increase the annual blending targets for the Renewable Fuel Standard (RFS) for 2017. Their criticism of the RFS program misses the mark. Instead of strengthening the standard, Congress should focus on repealing the mandate in its entirety.

In the letter, the Senators argue that EPA incorrectly applied the law and set the RFS levels too low. They state, “we remain concerned that [EPA] continues to use distribution infrastructure as a factor in setting the blending targets. The lack of distribution infrastructure was explicitly rejected by Congress as a reason to grant a waiver when the statute was adopted in 2005.”

The Senators are incorrect. Congress did not “explicitly reject” distribution infrastructure as a reason to grant a waiver. Congress gave EPA two reasons[1] to waive blending targets:

  1. If “implementation of the requirement would severely harm to economy or environment…”
  2. If “there is an inadequate domestic supply.”

The waiver provisions are at 42 USC § 7545(o)(7). If Congress explicitly forbids something, it must be written in law. Congress did not codify that prohibition into law; thus, it is not “explicitly forbidden.”

The Senators also argue that EPA should violate the law to promote biofuels and cellulosic ethanol. The D.C. Circuit Court slapped down EPA in 2013 when the agency did just that.

If the Senators wanted the RFS to force cellulosic ethanol plants to be built, they could have written the law to require that, but that is not what they did when they wrote the RFS. Instead, they called on EPA to make projections, not technology-forcing requirements.[2]

EPA has previously tried to promote cellulosic ethanol through the RFS. In 2012, EPA stated that its intention in setting the cellulosic obligation at a high level was “to balance such uncertainty with the objective of promoting growth in the industry.” EPA went on to say that setting the biofuel mandate at a high level would “provide the appropriate economic conditions for the cellulosic biofuel industry to grow.”[3] The D.C. Circuit, however, overruled EPA, and rejected EPA’s attempt to create a cellulosic biofuel market.[4]

The reality is that cellulosic biofuels have failed to materialize. Actual production of cellulosic biofuels has failed to surpass more than 7 percent of mandated levels in a given year since 2010. The Congressional Budget Office indicates a potential shortfall of nearly 15 billion gallons by 2022. When EPA realized production was virtually nonexistent, they moved the goalposts and changed the definition of cellulosic biofuel to include certain types of compressed natural gas and liquefied natural gas collected from landfills as cellulosic biofuel.

The Senators correctly identify that, since 2013, “not a single new cellulosic project has broken ground in the United States and many planned or previously announced projects have been halted.” This is not because of a failure of policy, but because these fuels are incredibly expensive and uneconomical. The RFS cannot make cellulosic biofuels commercially viable. The reason corn ethanol has been used to meet the majority of the RFS volume requirements is because it actually serves as an affordable and effective octane booster, and refiners would likely be blending millions of gallons of corn ethanol a year in the absence of the RFS. Cellulosic biofuels have shown no such cost-effective usefulness and cannot be brought “back on track” through federal mandates.

The signatories should reconsider their position on the RFS and realize this program is flawed. Instead of strengthening the mandate, the RFS should be fully repealed. This broken policy is ineffective, outdated, and beyond remedy.

[1] 42 USC § 7545(o)(7)

[2] American Petroleum Institute v. Environmental Protection Agency, No. 12-1139 at 13, Jan. 25, 2013,$file/12-1139-1417101.pdf

[3] Id.

[4] Id.

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