A new Competitive Enterprise Institute report makes the case for repealing the federal biofuels mandate, citing economic, ethical and real-world problems.
The CEI report warns that trying to force annual increases in ethanol/oil blending could spur oil refiners to simply reduce the domestic supply of gasoline and diesel, which would inflate fuel prices and impose new economic costs.
“Congress should repeal the Renewable Fuel Standard so that consumer preference and competition, rather than central planning policies, determine which fuels succeed or fail in the U.S. marketplace,” Marlo Lewis, CEI senior fellow and author of the report, said in a statement.
In June a group of 39 U.S. senators led by Chuck Grassley, R-Iowa, and Amy Klobuchar, D-Minn., urged the Environmental Protection Agency get “back on track” with compelling oil refiners to comply with the program’s increasingly unattainable goals, the CEI said.
The EPA is scheduled to finalize 2017 requirements for the federal RFS mandate later this year.
“Contrary to ethanol lobby propaganda, the blend wall is not a product of oil industry scheming, but of economic and technical realities,” Lewis said.
The CEI said most vehicles, as well as lawnmowers, boats, motorcycles and other small engines, are not designed to use high biofuel blends.
The report found that there’s little consumer demand for cars and equipment that can use higher blends.
The CEI said those fuels reduce fuel economy, forcing consumers to spend more and fill up more frequently, to drive the same distance. Ethanol contains about a third less energy than an equal amount of gasoline.
Lewis addresses a Capitol Hill panel on the topic yesterday at 3 p.m. ET.
This post originally appeared in Trade Only Today and can be found here.