Full Title: Ethanol’s Lost Promise An Assessment of the Economic Consequences of the Renewable Fuels Mandate
Author(s): Energy Policy Research Foundation
Publisher(s): Energy Policy Research Foundation
Publication Date: 9/2012
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Under U.S. law, U.S. petroleum refiners and other so-called obligated parties must blend ever larger volumes of renewable fuels into the U.S. gasoline and diesel fuel supply. The program is known as the Renewable Fuel Standard (RFS). Corn ethanol is not mandated under the RFS. However, 98% of “conventional biofuels” produced in the U.S. and blended into gasoline are derived from corn, thus creating a de facto mandate for corn ethanol. The RFS mandate for conventional biofuels is set to rise from 13.2 billion gallons in 2012 to 15 billion gallons in 2015. With the additional mandate for advanced and cellulosic biofuels, the total blending requirement rises to 36 billion gallons by 2022. The U.S. Environmental Protection Agency (EPA) administers the RFS program and is the only U.S. agency with the authority to waive or delay implementation of volumetric mandates for renewable fuel blending into the gasoline and diesel pools.
In response to concerns over reductions in corn production from the widespread drought, five state governors have petitioned the EPA to either reduce or waive the RFS mandates and nearly 200 members of Congress (from both the Senate and House) have publicly announced their support for a waiver. The EPA announced on August 20, 2012 that it will accept comments for 30 days on the governors’ waiver request. The EPA is expected to act on the requests before November 13, 2012, but the agency’s likely response, if any, is unknown.