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There is nothing that exemplifies the feckless and deleterious effects of government intervention in private enterprise more than the Renewable Fuels Standard. Using the boot of government to mandate that private enterprise use an inefficient product of a special interest to the detriment of consumers and job creators is the worst form of tyranny. James Madison is rolling over in his grave.
Yet, much like Obamacare, the ethanol mandate has become unworkable even from a liberal perspective. Given that most car engines cannot handle more than a 10% ethanol blend, there is simply not enough demand to fill the targeted quota of 18.15 billion gallons in 2014 as prescribed by the 2007 Energy Independence and Security Act (EISA). As such, the Obama administration was forced to lower the standard to 15.21 billion gallons.
Many conservatives are heralding this as the first victory over the intractable ethanol lobby. However, rather than celebrate an infinitesimal decrease in the mandate, we should work to repeal the remaining 15 billion gallons worth of statism.
Last year, PricewaterhouseCoopers published a study detailing the harmful effects of the ethanol mandate. They found that the increase in food prices from the ethanol mandate costs a restaurant $18,000 per year. Needless to say it hurts the average consumer at the grocery store. When you take 40% of the corn crop and shove it into our engines, it creates an undeniable inflationary effect down the food chain. Had food prices continued on the same downward trend-line since 2005 (when the ethanol mandate was enforced), families would be paying $2,055 less for food every year, according to a study cited by the Heartland Institute.
Only in Washington can the prevailing wisdom dictate that corn be used in our engines instead of on our kitchen tables. Only in Washington can they raise the cost of food for the average family by over $2,000, and then increase spending on food stamps to cover the poverty they engender.
It’s time to kick the ethanol beast while it’s down. If ethanol is really God’s gift to the world, as industry lobbyists suggest, why do we need a government mandate to push their product? Fuel blenders would clamor for it on their own.
The House is considering several good energy bills this week. They should add in a full repeal of the RFS. Do they stand with free markets, consumers, and small businesses or do they stand with Soviet-style central planning and special interests?