A little more than a week ago, I wrote about the troubles former EPA Administrator Scott Pruitt had faced in rural America, and which he brought largely upon himself, because of the failure of his agency to faithfully implement the Renewable Fuel Standard (RFS).
The RFS, passed by Congress in 2005 and updated in 2007, guarantees a modest but certain market for renewable fuels — chiefly corn-based ethanol. It had several core purposes: to reduce dependence on foreign oil, lower the price of automobile fuel at the pump, reduce carbon emissions, draw investment into the rural economy, and encourage the regrowth of manufacturing in parts of the country that the global economy was leaving behind.
{mosads}Conventional ethanol is a highly competitive fuel — it costs about 1.40 per gallon — so it doesn’t need and doesn’t get federal subsidies or tax breaks. What the renewable industry does need, and what the RFS gives it, is a guarantee that the demand for biofuels cannot be crushed either by the international oil cartel or the anti-competitive actions of domestic oil companies which control the distribution chain for automobile fuel.
The RFS has achieved its objectives; in fact, it may be the one federal energy policy which actually has worked. A modest volume of ethanol is blended into most gasoline throughout the country. That small share is enough to supply 10 percent of motor fuel, reducing imports while also holding down fuel prices at a time when oil prices are spiking.
Burning ethanol in place of gasoline reduces carbon emissions by 43 percent, on average, according to federal analysis; other sources of renewable fuel, like cellulosic ethanol, reduce emissions even more. There are more than 200 ethanol plants distributed all throughout the heartland, creating hundreds of thousands of good jobs in rural areas, which were suffering even before other countries imposed harsh retaliatory tariffs on American agriculture.
All of this explains why President Trump strongly supports the RFS. But Pruitt evidently didn’t, because the EPA under his stewardship engaged in a series of poorly concealed efforts to undermine the law. The White House squelched some of those efforts, but others caused a lot of damage to the rural economy.
In my previous column, I wrote that Pruitt’s successor, Andrew Wheeler, has a window to restore the EPA’s credibility on these issues. There are important affirmative steps Wheeler could take. He could, for example, change the EPA rule that prevents the sale of E15 (a 15 percent ethanol blend in gasoline) during the summer. That change is vocally supported by the White House and is long-overdue. At a minimum, Wheeler needs to send a strong signal that he will carry out the law’s clear intent to protect a growing market for renewables, consistent with gradual growth in the industry.
But Wheeler may be headed in a different direction. He speculated that he might fall right back into the destructive patterns set by Pruitt. His justification is that “when everyone is complaining about a program, we need to look at ways to change the program.”
But the RFS is not the EPA’s program to change; it is a statutory directive, and Wheeler’s job is to implement it, not impose his own personal views on the careful balance Congress struck when it passed the law in the first place.
And everyone is not complaining about the RFS. The oil companies are complaining, because they would rather make an additional profit by exclusively selling their own product at their own pumps, even if it means consumers pay a higher price and America’s renewable fuel industry stagnates. That position is understandable — of course the oil companies would rather discourage the growth of their competitors — but it’s also what the RFS was designed to guard against.
It’s not like the oil companies have any real cause to complain. The RFS has not held them back from posting record profits.
The RFS is not just about protecting the environment. It is central to America’s agricultural and energy policy. Congress recognized that when it required the EPA to consult the U.S. Department of Energy and the U.S. Department of Agriculture (USDA) on biofuels. Wheeler needs to listen to leaders like USDA Secretary Sonny Perdue, who are urging the EPA to expand U.S. biofuel markets. The RFS has friends in Congress, and they are running out of patience with the constant regulatory attempts to undermine a law which is working, as intended, to enhance the economic and energy security of the United States.
Jim Talent, a former Republican senator and representative from Missouri, championed the creation of the Renewable Fuel Standard in 2005. He is co-chairman of Americans for Energy Security and Innovation, a member of the U.S.-China Economic and Security Review Commission, and a senior fellow at the American Enterprise Institute and the Bipartisan Policy Center.