Where to begin with the monstrosity that is the Renewable Fuel Standard (RFS Mandate)? It is rare that one gets the opportunity to highlight a government initiative so awful, that I can say without an ounce of hyperbole, that it is starving children. STARVING. CHILDREN.
How? And what does that have to do with Olson and Barton? Well let’s start at the beginning of this merry adventure.
In the first decade of this century, our brilliant leaders embarked on a quest to shove off the global warming that isn’t happening, and decided that they’d take some steps to force us to be less dependent on foreign oil and more dependent on corn. Ethanol as it is known, was subsidized and encouraged with great gusto in an attempt to greenify our roads.
In 2005, they took that encouragement a step further by mandating that a percentage of fuel be blended with ethanol. Up to 15 percent blending actually. Why only that much? Because any more can damage engines, which will be great for greenifying our roads because our cars will be broken.
But ok, so they required a blend and they stopped short of destroying our cars. Bravo. As it turns out, that blending limit is about the only thing they got moderately correct. What they got wrong was how much total needed to be blended into the fuel supply as mpg standards increased and fuel consumption went down. This created an issue where ethanol blenders were being required by government to continue blending ethanol beyond safe amounts in order to comply with the ridiculous mandate. This forced blenders to buy future supplies of ethanol to blend into future supplies of fuel that they may or may not sell. Not surprisingly, fuel prices rose as a result.
Are we having fun yet?
Of course all of this was at the cost of something we commonly call “life sustaining food.” By taking so much corn out of the market for gas. And while kids starved all over the world, farmers, looking to make some of that sweet sweet government dough, began harvesting the living crap out of corn. This led to less crops being used for other types of food. So the price of corn skyrocketed along with every other food on the planet. Of course, that restricted the supply of food worldwide which, you may not know, is what we also feed animals like pigs and cows. So farmers that deal with animals had to pay more for feed which made their livestock more expensive which drove up meat and poultry costs as well.
So after restricting the food supply, starving children, driving up your grocery bill and increasing the cost of fuel, was the government done yet? Of course not! Because now they want to expand it!
Unbelievably enough, Republicans are jumping on board.
Not content with the destruction currently in the RFS Mandate’s wake, Reps. Pete Olson and Joe Barton (R-TX) are pushing HR. 1959 which would expand the RFS mandate to include natural gas based ethanol.
That might relieve pressure on corn prices, but only by artificially boosting demand for natural gas — driving up the price of a vital feedstock and energy source that’s powering the resurgence of American manufacturing.
It’s directly at cross-purposes with the idea of promoting “renewable fuels,” which were supposed to be anything but fossil fuels like natural gas. The theory is that we’re running out of oil and gas domestically, and alternatives would displace imports. But American energy security is no longer in peril, with booming oil and gas production thanks to technological advances in hydraulic fracturing and horizontal drilling. We’re leading the world in petroleum production already and projections show continued increases. So why convert natural gas to ethanol? Why mandate ethanol use at all? What’s the point?
What could drive Texas Republicans to support such a thing? Well, much like Iowa loves their corn subsidies, some in Texas want to take advantage of the natural gas boom by diverting government power and money to their constituents and donors.
Side note: the industry group that has also been pushing for the legislation is The Domestic Fuel Solutions Group (DFSG). COMPLETELY coincidentally, they’ve been in DC this week to speak with the RSC and other groups. Crazy right? They must be there to see family.
The RFS Mandate must be fully repealed. This proposed expansion is going to be billed by people like Olson and Barton as a solution. It is not a solution. As always, the solution is simple: get the government out of the market.