End the Renewable Fuel Standard Now, and Lower Gas Prices

The Renewable Fuel Standard, or RFS, is a federal program mandating a minimum addition of "renewable" fuels to transportation fuels in the United States. These renewables can include ethanol, biodiesel, and other biofuels. The Environmental Protection Agency administers this program, created by the Energy Policy Act of 2005 and revised by the Energy Independence and Security Act of 2007.

The problem is, it's costing American taxpayers a lot of money at the pump.

The Energy Policy Research Foundation (EPRF) has crunched some numbers on this, and the findings paint an expensive and unpleasant picture. These and the other various regulations and requirements are estimated to be costing a typical American family of four an added $734 per annum in fuel costs. An EPRF paper states in part:

The RFS, enacted in 2005, and then strengthened in 2007, is complicated. Following a period ending in 2022 of statutory requirements determining blending percentages, its administrative authority has become discretionary. Currently, provisional blending percentages for 2026 and 2027 are under debate and review along with provisions of reallocating previously made exemptions as further blending requisites.
Compliance is managed using RINs (Renewable Fuel Identification Numbers), a costly credit system that ascertains blending requirements. RIN prices reflect whether blending mandates are aggressive or lax. These costs are then passed on to consumers of gasoline and diesel.

According to their data, the states with the highest RFS cost, adjusted for population, are Alabama, Mississippi, Wyoming, North Dakota, and Missouri. We're talking billions of dollars.

Tackling Affordability: Trump Floats Big Move to Ease Pain at the Pump

It gets worse. The EPA's periodic changing of ethanol mandates have refineries nationwide struggling to keep up. The EPA's credit system requires these blends if a producer is to sell gasoline or diesel fuel, meaning that the companies running these refineries either have to adjust their blends or purchase RIN credits to keep producing. Refineries, mind you, are not designed and built to be idle for any length of time; they have to keep producing.

There are, also, a fixed amount of RINs to be sold - an effective cap on production. Supply and demand applies here; a cap on production will, necessarily, raise the prices at the pump. Global oil prices are sliding downward now, mostly because of the reported Iran deal (details of which, as of this writing, we still haven't seen). Gasoline and diesel prices have been trending downward as well, but slowly; whereas a month ago it cost me $200 to fill my Super Duty pickup with diesel, now my best guess is that it would only cost $180.

In other words, these ethanol and biofuel mandates, undertaken in the shaky name of anthropogenic climate change - yes, this is a policy championed by climate scolds, aimed to prevent the planet from seeing a net gain in global mean temperatures of a degree or two in the next hundred years - are acting as a sea anchor on the American economy. The cost of energy affects everything else in the economy, and the cost of gas and diesel is one of the greatest factors; transportation fuel costs are added into everything we buy, every product, every service, everything. And this policy is artificially inflating transportation fuel costs.

It's time that President Trump orders the EPA to scrap the mandate. If oil companies want to continue producing fuels with biofuels added, for whatever reason, they are free to do so. But this government mandate is not only hitting American families in the pocketbook, but it's also on shaky constitutional grounds, under the 10th Amendment - as is the entire EPA.

What say you, Mister President? It's time the RFS went away.

Editor’s Note: Thanks to President Trump’s leadership and bold policies, America’s economy is back on track.

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