Brace Yourself: Feds Take Sensible Step on Energy Policy
The Environmental Protection Agency (EPA) is cutting the amount of ethanol and other biofuels that must be blended into the nation’s fuel supply, a victory for oil companies that call the federal ethanol mandate unworkable.
On Friday, the EPA proposed draft 2014 blending volumes under the federal Renewable Fuel Standard that are lower than the 2013 requirements, and far less than called for in a 2007 law that expanded the mandate.
The EPA is proposing to require 15.21 billion gallons in 2014, down from 16.55 billion gallons in 2013, marking the first time the agency has lowered the target from the prior year.
A senior administration official said the Obama administration is firmly supportive of biofuels, but said “market, infrastructure and other constraints” warrant paring back the mandate.
If you’re wondering when the hell the Obama Administration actually started worrying about the real-life effects of their policies, the answer is: when it put them at cross-purposes with a well-financed lobby. As the Wall Street Journal notes:
The EPA says it is trying to fix a problem known as the “blend wall,” which occurs when the annual requirement mandated by Congress exceeds the amount of ethanol that can be mixed into conventional blends of gasoline.
Oil companies and refiners have been warning of the blend wall for several years. If the EPA had stuck to Congress’s original target, refiners said they would have hit the blend wall in 2014 for the first time.
Which, of course, the ethanol lobby is using as an argument that this whole thing is one big gift from the government to “big oil.” That’s pretty rich coming from an industry that wouldn’t exist at any substantial scale without political collusion.
What’s the difference between ethanol and gasoline? You don’t need to pass laws to create a market for gasoline. The oil industry isn’t looking for special favors in this case; it’s looking from relief from a government-imposed drag on its business. The ethanol folks, meanwhile, are the ones trying to use state power to force people into buying their product. Which one sounds more corrupt to you?
As Drew noted earlier this week, ethanol is one big disaster. It doesn’t work in terms of economics, it doesn’t work in terms of energy, and it doesn’t work in terms of the environment. In a perfect world, we would’ve been able to abolish its mandate outright. In this flawed one, seeing it reduced at any level is a welcome change of pace.