We did it! The U.S. government finally released the numbers for the amount of ethanol it requires refiners to blend into gasoline for this year (true, we’re nearly halfway through it, but better late than never, right?), next year (OK, a little more lead time, that’s better), and…last year (wait, what?). That’s correct, we only just now decided the biofuel quotas for 2014. But that’s only the beginning of what has become a long list of problems with the Renewable Fuel Standard—the nationwide program meant to prop up “green” biofuels.
We say “green” because studies have shown that corn-based ethanol, which constitutes the vast majority of our biofuel volumes, isn’t actually environmentally friendly. Worse, by devoting corn crops to transportation fuels, we drive up global food prices, starving the world’s poor. And in practice, the mandate system is a farce, and not only because of delays in setting quotas. Refiners can only blend so much ethanol into gasoline before it starts harming engines not specifically made for that purpose, setting what’s been called a “blend wall” for the industry that has forced many producers to snatch up credits called RINs just so they can say they’re following the law.
The USDA just announced a plan to help overcome this blend wall by investing $100 million in gas pump infrastructure to make higher ethanol blends more readily available to the consumer. Of course, that’s only one component of the blend wall problem—consumers still need to buy new cars capable of running on these ethanol-rich fuel varieties. Asking every driver to upgrade is, for obvious reasons, out of the question, which means any attempt to tear down this blend wall is going to take decades, as older cars are gradually phased out.
Presidential candidate Hillary Clinton has recently reiterated her support for biofuels in an op-ed for the Iowan newspaper the Gazette, and while much of the column was spent touting the dubious green merits of the fuel source, she did touch on one of the more promising aspects of the industry:
The Renewable Fuel Standard can continue to be a powerful tool to spur the development of advanced biofuels and expand the overall contribution that renewable fuels make to our national fuel supply. But we also can’t ignore significant changes to the energy landscape since the RFS was expanded in 2007. We have to get the RFS back on track in a way that provides investors with the certainty they need, protects consumers, improves access to E15, E85, and biodiesel blends, and effectively drives the development of cellulosic and other advanced biofuels.
Cellulosic biofuel differs from its corn-based cousin in some important ways: it can be grown on marginal land, so it won’t drive up food prices, it passes green muster, and it has relatively high yields. Unfortunately, it hasn’t seen much commercial success, as producers have struggled to grow enough of it despite federal mandates. An Italian facility has claimed to have made some breakthroughs in advanced biofuels, but like most other renewable energy sources these promises always seem to lie ten or twenty years away.
America’s biofuels hopes may have been well-intentioned—the notion of a renewable, domestically-produced fuel source is certainly enticing—but setting mandates divorced from the reality of what suppliers could actually produce, and what the market actually demanded, was a grave mistake. Subsequently delaying the release of new annual targets by more than a year has only compounded the problem.
The RFS was signed into law by George W. Bush, and Obama has taken the baton and run with it, making this a bipartisan boondoggle. And now Hillary seems keen to continue this farce. It’s the nightmare that just won’t end, and nothing we’ve seen so far suggests it can be easily fixed. Bills are wending their way through Congress to reform the RFS, but the 113th Congress had its own attempts to solve this problem sputter and fail. Here’s hoping the 114th has better luck.