Only in Washington do we call expanding a program “reform” and more special-interest handouts “fixes.” That’s precisely what’s happening with the Renewable Fuel Standard (RFS) — an outdated ethanol mandate that drives up gasoline prices and puts refiners out of business.
In a continuation of this unending saga, corn and refining state senators met again at the White House earlier this year to discuss “solutions” for the RFS’ many shortcomings.
For more than a decade — as free market competition and private sector ingenuity, not government’s heavy hand, transformed our nation’s energy outlook for the better — American consumers, family farmers and refiners have suffered under this economically and environmentally destructive policy.
Like other government policies that attempt to pick winners and losers, the RFS creates many of the latter and very few of the former. It’s a prime example of the economic phenomenon of concentrated benefits — for corn states in this case — and dispersed costs — thrust upon the millions of other Americans who pay more at the pump without any meaningful benefits for doing so.
At the time of its initial passage — several years before the first iPhone was launched — America’s energy outlook was much different, with higher prices at the pump, limited access to domestic supplies, and a deepening reliance on foreign energy sources to meet our increasing demands.
Given the perceived domestic energy scarcity and rising consumer costs, politicians of both parties cast their vote to “grow” more of our energy from corn in our nation’s heartland.
But the days of American energy scarcity, thankfully, are gone.
Today, America is a global energy player, poised to become a net exporter. And this has all happened in spite of the RFS, not because of it.
With the United States awash in oil and natural gas, the ethanol mandate is a fundamentally unnecessary policy of yesterday. Yet, faced with these facts and growing frustration from American families and businesses, as well as many across the agriculture community, the Trump administration and some in Congress are considering options to prop up the mandate when they should be finding ways to end it.
So-called “fixes” that have been proposed by some special interests are more government meddling with the fuels that American consumers are forced to use. It’s classic Washington. For example, year-round “E-15” (fuel containing 15 percent ethanol) sales give corn growers government-guaranteed market share — or backdoor subsidies — but will harm drivers whose cars weren’t built to run on ethanol while charging them more at the pump. Likewise, allowing exported gallons of ethanol to count toward domestic RFS blending requirements provides some relief for the refinery industry, but still leaves a pseudo-market intact.
These aren’t real reforms. They’re simply attempts by politicians and an army of special interests to further distort energy and fuel markets. There’s no rationale or economic justification to maintain this outdated mandate.
For the sake of consumers, family farmers, refiners and our environment, Washington should end this failed policy once and for all before it does any more harm. The latest so-called fixes to the program will only make matters worse.
Democrats and Republicans both bear responsibility for this disaster. Too many in Washington listen to a small but powerful group of special interests rather than the American people.
Fortunately, an opportunity exists for both parties to listen and be responsive to the people they represent.
It’s time for Washington to finally repeal the RFS, get government out of the business of picking winners and losers, and let the free market move our energy economy forward. Enough is enough.
• Thomas J. Pyle is president of the American Energy Alliance (@AEA).
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