The governors of eight states, along with 175 members of Congress, called on President Obama and the EPA to grant waiver from the Renewable Fuels Standard that will require refiners to blend 13.2 billion gallons of renewable fuels this year.
Drought conditions have severely hampered corn production in much of the country – it is projected to be the smallest harvest in six years – and as much as 42% of that group is slated for fuel.
The governors and members of Congress were worried about the impact a corn shortage would have on food and fuel prices, but apparently the Obama administration isn’t concerned at all:
President Barack Obama’s administration rejected a request from the governors of eight U.S. states to waive requirements for blending corn-based ethanol into gasoline, said a person familiar with the decision.
Market conditions don’t justify such a move, said the person, who declined to be identified because he isn’t authorized to speak for the Environmental Protection Agency. Gasoline refiners will be required to blend 13.2 billion gallons of the biofuel this year, the EPA said in rejecting petitions from the governors of Arkansas, North Carolina, Maryland, Delaware, Georgia, Virginia, New Mexico and Texas as well as members of Congress.
The market distortions the Renewable Fuels Standard creates are bad for our economy.
“An economist in Indianapolis just calculated that the U.S. is losing a million jobs this year—along with $30 billion in economic growth—because we shifted too much of our corn into ethanol,” reports the Center for Global Food Issues. “Tom Elam says direct employment in the food industry would have produced three times as many jobs processing and marketing meat as making ethanol from the same corn. Elam calculates the foregone jobs at 941,000. That doesn’t even count the myriad of jobs that would have been needed to support the newly employed one million Americans.”
What’s more, as this infographic from Smarter Fuel Future shows, food prices have increased significantly since the RFS became law:
I’m not necessarily against so-called “renewable fuels” generally, or against corn-based ethanol specifically, but it has to make sense in the marketplace. The problem is that these fuels don’t make sense, their production is hurting the marketplace and the economy, but they’re produced anyway because the government mandates that it should be so.