Crony Capitalism

End the Failed Renewable Fuel Standard Experiment

Why Congress should abolish the ethanol mandate.


It's time for the annual congressional fight over the Renewable Fuel Standard, or RFS. In one corner sit corn farmers and their representatives, who fight tenaciously not just to preserve the RFS but to expand it. In the other sits, well, just about everyone else. Whether you are a refiner, a consumer, an environmentalist, a free market economist, or just someone who cares about good government, there is ample reason to oppose the ethanol mandate.

Since 2005, the federal government has required that refineries blend increasing amounts of ethanol (grain alcohol) with gasoline. There are requirements for cellulosic, biodiesel, and advanced biofuels, with the rest of the mandate typically being met by corn ethanol since it is the cheapest.

The stated goals of the RFS were to reduce reliance on foreign energy and to move toward cleaner fuel sources. It falls short on both fronts.

Worries about dependence on foreign oil were mitigated by the U.S. shale oil and fracking boom, exemplifying the sort of innovation and market changes that central planners inevitably fail to account for. The RFS is worse than unnecessary when it comes to reducing foreign energy consumption, which is itself a goal of dubious benefit. The RFS works against this objective because meeting the excessive biodiesel mandate has actually required significant imports.

Compounding bad policy with worse, the Commerce Department keeps imposing tariffs on countries selling the cheapest biofuels available to meet the mandate.

The RFS also fails to deliver on the environmental front. A recent Cato Institute report by Arthur Wardle highlights the impact of expanded land use for corn—with the increased application of nitrogen fertilizer leading to runoff that contributes to the hypoxic dead zone in the Gulf of Mexico and kills sea life—as evidence that "the research on the Renewable Fuels Standard is clear that it degrades the environment." The Cato report also cites a meta-analysis, published in the American Journal of Agricultural Economics, of studies that modeled the life cycle greenhouse gas emission of ethanol versus gasoline and found a meager reduction of only 0.23 percent.

Sadly, Congress is not currently preparing to revisit the big picture. The current battle is primarily over the use of waivers authorized by the law to mitigate the negative impact of the mandate on small refiners that are unable to blend their own ethanol or afford offsets. The House just convened a hearing on the topic, titled "Protecting the RFS: The Trump Administration's Abuse of Secret Waivers."

The Obama administration underutilized the hardship waivers, and some refiners consequently went out of business. The corn ethanol lobby is now unhappy with the number of waivers the Environmental Protection Agency has granted in recent years, even though they are a big reason why the mandate has not done much more harm. They also want higher volumes to be required on remaining refiners to make up for the hardship exemptions.

The statute provides no authority to reallocate obligations to other companies, and doing so would move policy in the wrong direction. As volume obligations increase, it's vitally important that the waivers be preserved or else the industry would be hollowed out, leaving only the largest refineries. The waivers may not prove to be enough, so lawmakers could also consider capping the costs of Renewable Identification Numbers, which small refineries purchase from their larger counterparts in order to meet obligations that they cannot produce themselves.

Eliminating the mandate and its market distortions altogether would be even better.

President Donald Trump is trying to have it both ways, promising to please small refineries and farmers at the same time, which may be impossible. The administration wants to placate farmers for political reasons, but economic reality is proving to be too much of a challenge. Instead of extending and expanding crony handouts to farmers, perhaps the administration should consider ending the trade war that has hit farmers especially hard in the first place.


NEXT: 'Mattress Girl' Emma Sulkowicz Walked Into a Libertarian Happy Hour. No, This Is Not a Joke.

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  1. Why, whatever shall we do with all the excess grain alcohol?

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      thought for one sentence Very Good had an answer for you

      1. A helpful spambot? I’m skeptical…

        1. second sentence ruined it.

    3. No, no, no, fuel-grade ethanol is *not* “grain alcohol”! That is a vicious lie invented by a truly evil corporation called Archer-Daniels Midland, which brokers *grain*. The truth is that it’s only *food-grade* (drinkable) ethanol that has to be made from grain, fruits, roots or any other food sources. *Fuel-grade* (i.e. ‘denatured’) ethanol can be made from *cellulose*, which means damn-near any kind of vegetable trash. This means that corn, wheat, or other grain-crops can be sold twice: the grain for food and the stalks for fuel. There are several different companies which have different methods of producing ethanol from cellulose, varying from cheap, ecologically harmless, slow, decentralized and public domain, up to fast, expensive, ecologically costly, centralized and proprietary. Left alone, these would sort themselves out on the open market. Also, don’t forget, one of the biggest purchasers of fuel-grade ethanol is the US military — which also purchases lots of algae-based bio-diesel fuel. The idea that bio-fuels aren’t economically feasible is false. So is the claim that “fuel-farming” is necessarily damaging to the environment. Sound, or bad, farming techniques can be found where *any* farming is done, regardless of what the crop is.

      1. All farming is damaging to the environment as it necessarily takes up land that would otherwise be left to nature. Of course, a lot of farming is worth this cost. That doesn’t mean that we should see well managed farms as good or neutral for the environment, rather they are less bad for the environment than the alternatives.

    4. back of the envelop calculation: how many dollars have we spent keeping the oil flowing.? DoD, oil depletion allowances, blind eyes to drilling externalities.

      who pays for the damage of 343,000 gallons spilled at keystone last week?

      who paid ultimately for Exxon Valdez and Deepwater Horizon.

      subsidies to corn ethanol pale in comparsion

      1. Who pays? The customer.

  2. We have alcohol free gas. I don’t know how they get around it.

    1. Part of the reason is that older cars can sustain damage from even 10% ethanol, so they have to allow for 0% to still be sold. Cars made after 2001 must be able to run on 10% ethanol, and after 2001 on 15% IIRC

      1. IIRC, ethanol was first added to gas at 5% back in the 1970s to reduce VOCs in the exhaust.

  3. The RFS works just fine, thank you very much. Congress gives money to corn farmers, corn farmers give votes to Congress. Along the way, there’s the biofuels industry – a wholly-owned subsidiary of the government-subsidized Boar Hog Teats, Inc. – that produces lots of things that almost look like jobs and revenue and material goods and so on.

  4. It is very unlikely that this issue can be addressed head on. As the article noted both political parties are beholding to corn farmer and ethanol producers. While fiscal conservatives would favor eliminating requirements, they are also more likely to need the support of corn growing rural voters. That being the case let me suggest the following approach.
    1. Keep automobile fuel standards. Less fuel used means less need for ethanol. Especially electric vehicle which need no ethanol.
    2. Develop alternate markets to attract farmers. Alternate uses for corn or alternate crops. Especially foreign markets. These help farmers and reduce the country’s trade deficit. Note this could be done with little or no government involvement.

    This is a long way around the problem but it might prove more successful.

    1. Keep automobile fuel standards. Less fuel used means less need for ethanol.

      Those CAFE standards are the reason we are relatively less fuel efficient now. The 1st round of that (with its setting of different standards for cars v light trucks) led directly to sticking SUV’s/vans on a light truck chassis v ‘station wagons’ on a car chassis. That upsizing of family vehicles was entirely unnecessary (and NOT demanded by customers either who merely wanted a ‘family car’) and led also to the elimination of smaller vehicles from road traffic via intimidation. So much so that by the 2nd round of CAFE, mfrs themselves are responding by eliminating cars altogether from their production line and everything will be upsized to truck/SUV. It’s fucking insanity and is a direct consequence of that CAFE standard structure.

      I do agree that fuel efficiency needs to be incorporated into the price of a vehicle. It is the purchase of a vehicle – not truly independent daily driving decisions – that drives a major portion of fuel usage. And that means ‘fuel’ should in part be a capitalized cost (ie something that is financed like the rest of the car). Govt has a role to make that happen – but not even remotely in the way that govt usually makes those decisions.

    2. How many fucking corn farmers are there anyway? Fuck Iowa and Nebraska and their handful of representatives and electoral votes.

      1. Obviously you are not a Republican.

        1. Or a Democrat. Farm subsidies have strong bipartisan support.

          1. Agreed. But Iowa and Nebraska are more important to Republicans.

      2. Corn is the industry for entire states. For every corn farmer, there might be dozens, to hundreds of jobs associated. Farmer needs a combine tractor, nitrogen fertilizer (a big oil energy hog to make fertilizer), haul the corn, make the ethanol, make the factories that make the ethanol….

      3. The majority of farmers aren’t even benefiting from the subsidies, though. The farmers I met when I lived out there (in Nebraska) were a lot more concerned with the EPA trying to dick them over than they were with trying to wheedle their way into that sweet farm bill money. The thing is, the red team elites are just as bad as the blue team’s about understanding what regular (or at least non-coastal) americans are like, and thus they think “farmers grow corn, the farm bill subsidizes corn, thus farmers will be angry if we take it away.”

    3. Develop alternate markets to attract farmers. Alternate uses for corn or alternate crops. Especially foreign markets. These help farmers and reduce the country’s trade deficit. Note this could be done with little or no government involvement.

      So you want to build an industry to grow broccoli at the scale that rivals corn ethanol production. Then, having surmounted that obstacle, you don’t want to sell the broccoli domestically, but internationally. And you think you can do all that with little to no government involvement… you wanna buy a bridge?

      1. Obviously you are not a Republican.

      2. Sorry about the Republican thing. I submitted a reply to the wrong comment.
        Here is what I would like to say. Agricultural states, like Wisconsin, have Universities with strong ties to farmers. The Extension program helps farmers with technics and markets. So if a big bucks Libertarian, like Koch, were to fund some grants to develop alternate cops and markets for the corn farmers you could get them to give up ethanol. It is the long way around but it might take less time.

    4. Neither of your proposed actions will do anything positive.
      1. The automobile fuel standards have not actually reduced total fuel usage. Their primary effect has been to increase truck sales at the expense of smaller cars. To the extent that they change actual user behavior (that is, the subset of people who either started in a truck or stayed in a car), the statistical evidence shows that we Americans have an implicit fuel budget and we drive more or less to meet that budget. Translation – a more fuel-efficient car leads to more driving such that the total amount of fuel used in a year is close to constant.

      2. Alternate markets won’t help because these are mandates. These mandates already drive the demand for corn artificially high. Developing alternative markets will drive the demand (and thus the price) even higher. Farmers will appreciate it – but it will do nothing to reduce the incentive to maintain the corn subsidy.

  5. To me, RFS has served it’s purpose and ought to be wound down. We started the program at a time where we were completely dependent on foreign oil. We are now oil independent. The program worked: it helped bridge the time gap between foreign oil dependency and oil independence.

    The stated rationale for the program is gone. Time to retire RFS.

    1. I mean, if you read the article, the program definitely didn’t work at all, we just achieved the goal via other means, mostly over the government’s strenuous objections.

  6. Hasn’t this also raised the price of tortilla chips as corn is diverted from the food market to the ethanol market?

  7. Surprisingly this totally skips the key reason to discard this, it’s unconstitutional. The federal government was never given the constitutional authority for this level of control over internal industry. When it comes to control over America and Americans republicans are like democrats, you ask them where the constitution grants them this power and they just look at you like you’re an idiot who doesn’t realize the constitution actually grants the federal government totalitarian power.

    1. You have a good point, but that ship sailed with the Wickard decision.

      1. Filburn got jobbed.

    2. One of the fears of putting the Bill of Rights into the Constitution was that it would be interpreted to mean the federal government has power limited by the Amendments, as opposed to power granted by the rest of the document. Sure enough, that’s exactly what has happened. Ask them where the constitution grants them the power to do something, and they will respond by asking what Amendment says they can’t.

      1. I personally think both sides of that ancient argument were right. Some argued that it would be construed wrongly as the only set of guaranteed rights, and they seem to have been borne out (just look at how few SCOTUS decisions cite the 9th amendment). Others argued that without any explicit rights laid out, the constitution wouldn’t provide a very effective defense against their encroachment by rapacious government, and I feel that view has been borne out as well.

        Face it kids, the founding fathers did their best, but they couldn’t outwit unending generations of assholes after them finding whatever flaws they could get purchase on for ugly, stupid, short-term political gain. The fact that it made it this far with roughly a third of our presumed rights intact is remarkable in its own right.

  8. What could possibly be wrong with burning food for fuel?

    1. Same things that will be brought about by depending on a fuel of finite supply to produce food in the first place. Shortages of both.

  9. The entire Dept of Energy was created to lessen our dependence on foreign source of energy. Complete fail.
    An engineer, George Mitchell, working for Continental Resources did it. He invented the improved fracking techniques at private expense. A national hero that no one knows.

  10. You may as well wishe for free ponies and ice cream.

    As long as Iowa remains important to the presidential primary, RFS is not going away.

    1. Agreed. That why we need a none government alternative. Give farmer a different market for corn.

      1. Or, maybe just maybe grow something else besides corn. There’s way more than an overabundance of motherfucking corn.

      2. I’d bet it can’t be done. Between organic foods and their regulation and food waste issues, I’m betting you couldn’t start a new veggie market of any consequence. Probably not even for corn, let alone the big three grains. And certainly not without a heavy hand of government involvement, if only to clear away the barriers set up by rent seekers… at first.

  11. Hmm, as EVs become a larger part of the vehicle fleet, will the corn lobby require people to buy ethanol fuel anyway?

    1. How about instead of putting ethanol in cars, then, just ship it to electric plants to be burned? We can close the circle of a ridiculous waste of time, effort and money that way.

      1. Don’t forget about all that diesel that has to be burned to plant and harvest corn and yeast that barely yields as much ethanol power as the diesel used to make it. Then and only then can the ethanol get shipped off and burned were another 50% of its power is lost to efficiency to generate electricity. Maybe the electricity can burn off another 50% of the sum power to make a solar panel that will output about 2% of the energy that went into creating it. Or maybe even a windmill where the wind never blows or something.

        lol.. Great point; excellent comment 🙂 +1000

      2. But as long as the liberals don’t have to see it – that’s all that matters. Lobbying for anything else would be like having a stock yard and butcher shop in the front of every Burger King.

      3. Your not as far off as you think there are plants using biomass for energy production. You don’t even need to make ethanol just burn the corn, stalk and all. Not real sure that corn is the most economical for biomass.

      4. Plants are horribly inefficient at capturing solar energy for the ultimate purpose of making electricity. Farmers can plant solar panels on their fields instead.

        1. Only if the water causes the panels to grow… I speak from experience on both ends.

  12. Whats funny is the “pleasure” of farmers around here would be to entirely eliminate farm subsidies. An article quoting an [R] Iowa Senators reason for voting against the recent farm bill, “Farmers don’t want to make their living from the Treasury Department.”

    Trump wanted to throw out the farm subsidies & the RFS. He got 13-[R] votes to throw out the farm subsidies and 0-[D].

    Whats more – Tariff’s have had no negative consequences here. Fact is; crop prices are up and that’s the bottom line.

    To paint the narrative that Trump is “trying to brown-nose” both farmers and refineries and then throw on top of that Tariffs are the underlying evil is just so misguided.

  13. They know that ethanol destroys engines. That’s why aviation fuel is ethanol-free. Government doesn’t want to be blamed for planes falling from the sky. That also shows how much of a shit they give about our cars and small engines. Broken windows and all that.

    1. Ethanol is not going to destroy engines. We have had the stuff in gas long enough to dispel that myth. As for aviation fuel, the difference in fuel blends is the performance needs of aviation engine. Aviation fuel is transitioning slow away from lead additives.

      1. My old weed whacker, snow blower and leaf blower would beg to differ, but they can’t. They’re dead. Condensation from ethanol allowed H2O into the fuel, and the rest is history. Vehicles with a computer and lots of sensors are better able to handle it, but ethanol rots engines that don’t have those things.

        1. Vehicles with a computer and lots of sensors are better able to handle it, but ethanol rots engines that don’t have those things.

          Even then, condensation from ethanol still rots those engines but they’re just much bigger and tend to get daily use so the rotting isn’t as critical.

      2. On the contrary, we have had the stuff in gas long enough to conclusively prove that “myth”. Ethanol mixed into gasoline is harder on engines than gasoline alone. Manufacturers have compensated some by over-engineering their engines but that drives incremental costs. And given the complete lack of a coherent business case in favor of ethanol-blended fuels, those costs are unnecessary.

      3. I’m a pilot and Moderation4ever you are mostly wrong. Piston airplane engines have to be lighter than car engines for obvious reasons and thus not as overbuilt. For example, they use a lot more rubber engine components and seals than cars which get eaten away by ethanol. Lycomings, Continentals, Rotaxes all do not tolerate ethanol. Most lower compression pistoned airplane engines can run on premium car gas as long as it’s ethanol free. Because of changes in pressure and temperature due to altitude changes that cars don’t experience they are also much more sensitive to water condensation and vapor pressure issues. Lastly, it is much more life threatening (not to mention litigious) when an airplane engine quits on you than if your car dies on the side of the road.
        Most aircraft engines run on 1950s technology because FAA certification makes it practically impossible to innovate in a reasonable cost and timely manner. Most airplane engines still use carburetors as opposed to fuel injection. Airplane engines don’t have anywhere near the sensors and computer control of car engines which makes car engines more tolerant of different blends and fuel additives also.
        You are somewhat correct in that airplane engines typically require different blends for the higher octane required which is why they still use lead as an octane booster. They switched away from fully leaded to the current 100LL (low lead) standard decades and decades ago. Except for that, nothing has changed. An alternative fuel named swift has been in the works for 20 years and isn’t anywhere near ready for primetime. If you’ve ever dealt with FAA certification, even if technical problems are worked out we are more likely to see cold fusion adopted before getting the nod from the FAA for a 100LL alternative.

        1. Thanks for the information on aircraft engines. It was a good summary.

      4. Uh, it’s been less than 5% in gas for a while, but above that only recently. If you regularly use the 10%+ stuff in an older car, it can destroy your fuel lines, and if you’re particularly unlucky, it most definitely can trap enough moisture in your fuel tank to ruin your engine. I strongly recommend you pay the premium to get the non-ethanol stuff if you can find it, and you have a car old enough to need it.

    2. I bought a flex fuel vehicle for that very reason.

  14. Years ago business sent me to Iowa. The first thing I noticed was the ads in the airport touted the corn subsidies. Out on the road, half the billboards seemed to be advertisements for the corn subsidies. It was weird. I had never seen ads for subsidies before.

    Later in the week I sneaked out to a Libertarian meetup. Only one other person showed up. But he was bona fide libertarian, so we got to talking. I mentioned the billboards. Whereupon a hush came over him and he leaned forward across the bar and whispered, “Don’t criticize the subsidy. It’s not wise here.”

    Huh? Ron Paul got second place in the Ames straw poll only two weeks earlier! (I missed bumping into him at the airport by only an hour).

    Yes, this is apropos the renewable fuel standard. Corn is subsidized not just for the HFCS market, but for the ethanol. The subsidies drive the state. Conservatives who would otherwise be skeptical of big government crowd each other away on their rush to the big government teat. Fuck the free market when gub’ment dollars are on the table! The advertise the subsidies to keep everyone in line. No one dares criticize the teat.

    1. No one dares criticize the teat cuz it is now the only teat in Iowa. Even if a monoculture corn/soy farmer wanted to switch away from that, they likely can’t cuz:
      a. all their capital investment is in the machinery of those two crops
      b. all their knowledge is about those two crops
      c. they are old and thus not very amenable to change anyway
      d. new farmers are old too (35% of new farmers are over 55 v 17% who are under-35) so established farmers can’t even sell/subdivide their land for different ideas.
      e. there is zero infrastructure in place for other crops on any scale at all.
      f. there will never be any infrastructure for other crops until non-farming people move back to those areas and create some local demand for those other crops

      1. Interesting article re the underbelly of the effect of those subsidies on barriers to entry/exit in farming. Unfortunately the implication of that means that merely eliminating the subsidies won’t work as intended either. That will just result in even more consolidation to ‘big’ – an even bigger ‘exit’ of people from the area – and an even bigger barrier to growing anything new.

      2. monoculture corn/soy

        What is a ‘monoculture corn/soy’?

      3. there will never be any infrastructure for other crops until non-farming people move back to those areas and create some local demand for those other crops

        Even if people move back, there won’t be infrastructure. The country doesn’t and hasn’t needed lettuce, broccoli, and cucumbers the way it needs/needed corn, wheat, and soy. You’re suffering from a number of fallacies, a main one of them being a selective abstraction where corn, wheat, and soy were just randomly selected (they weren’t) and that, having been randomly selected, couldn’t just be swapped for three more grains with little effect on policy, culture, or infrastructure.

  15. but but but Iowa. corn is pig food, not Mustang food.

  16. Wow. For anyone who wants to read the entirety of all the ignorantly perpetuated myths about the RFS and biofuels that have circulated for years without merit, this article and the vast majority of the comments posted to it are a one-stop-shop. What a shame. From the very beginning of the article, with this sentence (“There are requirements for cellulosic, biodiesel, and advanced biofuels, with the rest of the mandate typically being met by corn ethanol since it is the cheapest.”), it is abundantly clear the author knows nothing about the workings of the RFS. It is, however, only natural that this magazine and its readers/commenters would gleefully support continued subsidization of and protecting monopolies for the most profitable, unscrupulous companies in the world–Big Oil–at the expense of the livelihoods of hundreds of thousands of individuals, many of whom are farmers that put food on your tables and together create a decentralized, environmentally friendly energy economy. Nice going folks. You would make Trump, Icahn and many other oligarchs very, very proud. Perhaps before you take a stand against something, you should at least open your mind enough to know a little about it first. But that would take too much work.

    1. where is your article posted?

    2. Those “myths” are backed up by links, citations, scientific studies and rigorous financial analyses. You think we should ignore all that based on what, exactly? Your feelings that Big Oil is evil? (But that somehow Big Corn is not?)

      You want to talk about “open[ing] your mind enough to know a little about it first”, maybe you should take your own advice.

      1. Create your straw man argument against me, it only furthers my point. I can point to an equal or greater number of citations, scientific studies and rigorous financial analyses–ones that aren’t bought and paid for by Big Oil–to counter any point you could ever make on this. Your suggestion that Big Oil is an innocent victim to “Big Corn” is laughable on many fronts. The point of the RFS was to cap corn ethanol at 15 billion gallons–a mere 10 percent of the gasoline demand in the U.S.–and drive innovation in advanced biofuels. By 2022, the RFS was supposed to require 36 billion gallons of renewable fuel, only 15 billion of which was to be corn ethanol (I suppose you would prefer we go back to MTBE as a fuel oxygenate? Good luck drinking the ground water after that, buddy). But when the administrator of the program (EPA, if you were unaware) year after year continues to undercut the goals of the advanced biofuel portion (21 billion gallons) of the mandate established by Congress and signed into law by George W. Bush, then naturally this has a negative effect on investment in this sector.

        1. GWB was a RHINO on so many occasions and..
          “RFS was supposed to require 36 billion gallons of renewable fuel” – so “requirements” that led to the subsidies are needed to overthrow the “Big Oil Monopoly” or what?!?!?!

          In my book – a monopoly ISN’T the best most efficient use of resources. If Ethanol can compete with Oil why the mandate???? Did the Oil company come to your house with a gun and force you to buy pure gasoline? Yet, the RFS does come with guns forcing the market to produce more bio-fuel against all odds out of some unicorn chasing scam.

          Who in the world taught you to think the way you do?

          1. Dear TJJ2000,
            I am going to give you the benefit of the doubt and assume you are not as foolish as your post makes you appear. When I said signed by GWB, I am not taking a position on him, but simply stating a fact, so pull back your red herring. Secondly, dignifying your uninformed position will likely only provide you with much-unneeded fodder, but here goes. Please tell me to what subsidies you refer? If you knew what you were talking about, you would realize that the volumetric excise tax credit for ethanol went away many years ago; and the blenders tax credit for biodiesel has been expired for two years. As far as I can tell, the only ones receiving subsidies right now are the Big Oil companies, which receive billions and billions of taxpayer dollars per year to “drill, baby, drill” and “pollute, baby, pollute.” You state a monopoly isn’t the best, most efficient use of resources. Why, then, are you suggesting the oil companies should have a taxpayer-funded monopoly on energy? I am sorry to inform you of this shocking fact, but the government requires a lot of things: airbags in cars; safety standards in building codes; lead-free paint so when your child eats paint chips, it doesn’t cause irreparable harm; and ethanol and biodiesel in gasoline and diesel, respectively, for a variety of good reasons including fuel oxygenation for cleaner burns, reduced tailpipe and GHG emissions, and yes, providing robust markets for those terrible farmers who put food on your table and those horrible grease collectors who dispose of your waste. Are we expected to allow car companies, building contractors, paint manufacturers and oil companies to protect us from their own profit-driven motives, which, without regulation, would surely seek the cheapest means by which to peddle their products? Of course not. The RFS forces no one to produce more biofuel. It simply requires obligated parties to either purchase a determined amount of ethanol, biodiesel, biogas-derived CNG or other renewable fuel, or if they choose to not purchase and blend the actual gallons, then they have the choice to purchase RIN credits to maintain compliance. Your saying conventional and advanced biofuels are unicorns tells me exactly who you are and what you know of this. The fuels are real, global commodities. If the U.S. doesn’t use them, then take a dart and throw it at a global map because there are plenty of advanced economies around the world that will.

            1. Me Foolish – After this statement….
              “The RFS forces no one to produce more biofuel. It simply requires obligated parties to either purchase a determined amount of ethanol, biodiesel, biogas-derived CNG or other renewable fuel”…

              So Mr. Brilliant how does forcing obligated parties to purchase a ( I guess non-produced.. since … excuse me .. not-forced ) product NOT end up still being a politically induced force? And how does forcing them to purchase not be considered forcing?

              Yes, your right I hadn’t heard that the subsidies for ethanol had gone away; now how about those purchase obligations!! Can you really pretend forcing the purchase of something is not as fawl as subsidizing it.

              Maybe I’ll take some time to verify this as soon as you give me links to all these supposed “oil” subsidies you claim exists.

              BTW; Oil subsidies are just as disgusting as Ethanol subsidies in my book. So I’ll cheer with you on that front.

              1. How many do you need? I tried to send links but the comment was held up “awaiting moderation” (perhaps it will clear eventually, or you can check out “oil company subsidies” on fuel freedom dot org to name one of hundreds of sources of this information). You shouldn’t need me to send you links anyway, since it is common knowledge that Big Oil receives big subsidies that come out of our pockets, provided you work and pay taxes. It has been part of a long discussion on Capitol Hill for years. Must I show you how to use a search engine too?

                The last time I checked, supply and demand were two different things. If the government “forces,” as you say, oil companies to buy biofuel (this would be demand) for the public good, then no one needs to “force” production (this would be supply) since the market is more than happy to produce ethanol, biodiesel and other conventional and advanced biofuels to meet the demand.

                The point that you all seem to miss is that without these requirements, the oil companies, which own the market and all of the blending and distribution infrastructure, would not allow ethanol and biodiesel to compete in a free market because it has a monopoly on our liquid fuel economy.

                1. 1) Research gathered from any resource besides your link “fuel freedom” which is particularly a lobbying organization against oil says there is NO oil subsidies and whack-jobs like the link you insist on linking to uses “tax exemptions” to justify such an outrageous and misleading claims.

                  If you cannot produce ANY congress bills that funnel a subsidy check to Big Oil you’re making faulty (lying) claims by using the word subsidy! Why must your kind LIE, LIE, LIE??????? Don’t you have an ounce of honesty or decency in your being?

                  2) Lets consider this ridiculous idea that Big Oil is trying to “not allow” ethanol of which they are required to purchase anyways through some RFS mandate.

                  The Manufacturing Boss, “We need more money because we’re greedy!!!”
                  Worker, “Hey – we can buy ethanol cheaper or make it cheaper and throw it in with our gas and sell it for the same price..”

                  The Boss (You seem to delusionally imagine) replies, “NO WAY… We can’t make more profit or lower prices and generate more revenue by NOT wasting it all on drilling for oil!!?!?!!!”

                  Seriously — were do you learn to think like that?

                  1. Dear TJJ2000,
                    I think I am able to find your points, although not without some effort wading through your copious use of punctuation and misspellings. Perhaps you would benefit from checking out HR 3311 from the 114th Congress, titled, “End Oil and Gas Tax Subsidies Act of 2015.” This is what you wanted, right?

                    If you think a “subsidy” only consists of the government writing a check, then you are mistaken. Most “subsidies” come in the form of tax credits, exemptions, and so forth. Even the “subsidies” you rail against for renewable fuels, such as the long-sunsetted ethanol subsidy, was a volumetric tax CREDIT. The biodiesel “subsidy” that has been expired for two years is also a tax CREDIT. Subsidies take many forms.

                    And I am not sure I follow your little scenario. You seem to acknowledge that biofuels indeed lower the cost of fuel to end consumers. I applaud you for that realization. This is about market share, however, and oil companies protecting their profit centers. Oil refiners make their profits on refining crude oil, not by taking a value-added product someone else gained the value from such as ethanol or biodiesel and substituting it into their product stream.

                    Why would an petrochemical oil refiner want to remove 10 percent or more of their ability to profitably refine crude oil into gasoline, diesel, kerosene (or jet fuel), and high-value chemicals? Right. They wouldn’t.

                    So while ethanol is cheaper (roughly evidenced by the price of E85 vs. regular gasoline), its inclusion in gasoline means less profit by refiners, because instead of buying crude oil at $60 a bbl (there are 42 gals in a bbl) and being able to sell gasoline for $2.60 a gallon, they would have to buy already-refined ethanol at, for example, $1.50 a gallon and sell it (pro rated in blend) for $1.60 a gallon. The money is in the refining. That’s where the “value-add” comes in.

                    1. I see politicians do a lot of LYING too.. HR 3311 is nothing but IRS code exemption changes with a deceitful name…

                      “deny the tax deduction for income attributable to domestic production activities for oil and gas activities” ….
                      “a major integrated oil company may not use the method provided in subsection (b) in inventorying of any goods” …. blah, blah, blah…..

                      The many articles I ran into seems to be SPOT-ON and the more you dig the more you prove it. This is just a bill to BLOCK the Oil companies from getting any deductibles that every other company already gets.

                      My little scenario – was to show you just how STUPID your thinking is. But hey — If you want to DENY all tax exemptions for wind, solar, ethanol and every other “fad” driven commodity right along with Big Oil. I’d go along with that position.

                      E85 was cheaper with all the subsidies (YES, REAL PAYOUT CHECKS). You take the loss in MPG of ethanol and it really didn’t save anything. Please explain why ethanol plants started shutting down after government stop sending them checks. E85 was already on the market with the vehicles to support them. The had a running go (no advertising needed) and fell like a rock as soon as the taxpayers weren’t forced to pay for it.

                    2. Here’s your list of TAX CREDIT (YES, PAYOUT) – as in Earned Income Credit or any other Credit that can supersede expense.

                      Second Generation Biofuel Producer Tax Credit

                      Allows for a credit up to $1.01/gallon of second generation biofuel that is sold and used by the purchaser to produce a second generation biofuel mixture, as a fuel in trade or business, sold as a motor fuel at a retailer, or used by the producer to do any of the above.

                      Alternative Fuel Mixture Excise Tax Credit

                      Alternative fuel blenders registered with the IRS may be eligible for $0.50/gallon credit on the sale or use of their alternative fuel blend for use in that blender’s business operations.

                      Alternative Fuel Infrastructure Tax Credit

                      Fueling equipment for E85, as well as other alternative fuels, installed between January 1, 2006 and December 31, 2013 is eligible for a 30% tax credit of the cost, not to exceed $30,000.

                      So — Only AFTER the Federal Government gave “credit” of $1.01/gal, $0.50/gal, and up to $30,000 of 30% of all manufacturing of ethanol vehicles

                      IT STILL WAS A NO GO and couldn’t out compete Big Oil. No fret though; you want to be stupid you can still buy bulk-wholesale ethanol 200-proof ethanol for $27/gallon

        2. re: “I can point to an equal or greater number of …”

          And yet you didn’t point to even one of them. Just more paranoid rants.

          1. TJJ2000 and Rossami,
            It is pointless debating the issues with you because all you do is resort to ad hominem attacks. TJJ2000, those “subsidies” you mention to help develop alternative fuels are all expired, whereas taxpayers continue to fund Big Oil’s “subsidies” for the wealthiest companies in the world. You continue to ask where I learned to think the way that I do. It is called an education. Perhaps you should look into getting one. You continue to call my arguments and logic stupid, putting your remedial rhetorical skills on display. I think you have made it abundantly clear to anyone reading our string which of us is the stupid one.

            1. Geez Ron — WHERE?????!?!?!?!?!? Where are these Oil & Gas subsidies???????? Where????? How many times do I have to ask??? Your lies don’t seem to make them magically appear anywhere but perhaps in your delusional mind of fantasy land….

              YOU’RE A LIAR ON BOTH ENDS — The Tax Credits were Extended

              Trump should’ve Vetoed this crap – I’d like to think he would’ve except it was thrown in with the budget bill.

              1. TJJ2000,
                Nice try, but the extensions you refer to were passed retroactively, meaning in February 2018 they were extended from the time of expiration on Dec. 31, 2016, through Dec. 31, 2017. They have all remained expired since then, for the past two years. Perhaps you should actually read the information you use as a source to try and make your point, which actually supports mine. It’s getting tiresome letting you make my arguments for me. If it weren’t so easy and fun watching you make a fool out of yourself, I wouldn’t even bother to respond.

                1. And here’s your retroactive “Tax Extender and Disaster Relief Act of 2019” including 2018 where the [WE] foundation want’s to STEAL my money and give it to people who chase unicorns for a living…

                  I only hope is that someday your profound ignorance will no longer get in the way of becoming an honest and decent human being instead of just another member of the 73% DNC prison population.

                  1. A bill is different than a law. This has not been passed, so — as I said before — the tax credits for alternative fuels remain expired for the past two years, while the richest corporations in the world (oil companies) continue to receive tens of billions of taxpayer dollars per year in subsidies. It looks as if we need to add “how bills become law” to the long list of things you don’t know.

                    1. I try not to “learn” anything from compulsive liars.

                      But I will say — You just stated your VERY FIRST truth as far as I can see, “A bill is different than a law” — I almost died seeing an ounce of truth. Utterly shocking I tell you; imagine my surprise.

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  18. Any product that requires a long-term subsidy vs short-term ones (eg. Electric cars to cover transition costs) is usually a bad deal. But what politician will go against the farm lobby?

    Thanks to the way our Senate is structured, a majority of voters in the USA are represented by a mere 18 senators – the rest are from lowly populated over-represented agriculture states. Good luck cutting this subsidy!

    1. This entire debate about “subsidies” and electrification of transport is utterly ridiculous. Long-term vs. short-term subsidies? Give me a break. As if any lobbyists seeking subsidies for any particular industry approaches lawmakers saying, “Yes, we would like you to pass a long-term subsidy for us — we see no end to the need for it so just give us money in perpetuity.”

      So it is okay for electric cars to get subsidies but not biofuels? Biofuels’ distribution infrastructure is well-established.

      By the way, how do you think electric vehicles power up? Electricity. And how do you make electricity? It’s either dirty coal, or renewable energy that receives — guess what? Yes. Subsidies.

      Besides, if you want to get in your little clown car and drive 11 miles before you have to park it overnight and charge it up on “subsidized” renewable energy or dirty coal, help yourself.

      However, if you think electrification of the heavy-duty diesel market that drives our economy via delivery of goods by way of 18-wheelers, diesel-powered trains, cargo vessels, etc., will happen any time in the next 50 years, then you are not a realist.

      The batteries alone required to power an electrified 18-wheeler will take up so much room that no space is left for payload.

      And to address earlier mentions of “ethanol” in “airplane engines.” Come on. While you debate a nonissue about your little crop dusters with spark-ignited lawnmower engines and whether they can run on ethanol blends or not, in the real world all the major airlines are effectively demonstrating use of synthetic paraffinic kerosene, which is a renewable Jet-A or JP8 replacement used in jet turbines carrying thousands of passengers around the globe.

  19. So there are NO Subsidies with current fuel oils.??? Maybe you forgot the subsidy of military intervention and public lands subsidy.

    Because there is such a thing as transition costs, there is a difference between short vs long term subsidies. If something requires a subsidy in perpetuity then it is a bad deal, however in the case of electrification, since a lot of the infrastructure is already in place, short term subsidies would speed transition to a more efficient and price-stable mode of transportation. Not only are EVs much cheaper to operate and maintain, the will shortly be cheaper to build since the drivetrain has a fraction of the parts.

    Never said all thing will be electrified since jet travel and shipping may never happen but some things could. Haha maybe Google Marin Katsura electrification to see if it’s really a “pipe dream”.

    1. There are definitely subsidies with fossil fuels (see above). I am not anti-subsidy, particularly when they are for the public good — not handouts to the most profitable companies in the world who have known for generations that their products cause cancer and climate change and, not only do we provide them taxpayer subsidies, but we also have to pay the external costs associated with the effects of their fuels.

      What I am saying is “short-term” subsidies can become “long-term” subsidies without prior intentions of such.

      EVs are the new “golden child” of the political left but people rarely consider the rare elements needed to make their storage devices, how the grid might support such a conversion of the nation’s (or world’s) fleet of private vehicles, and where the power comes from, let alone other factors.

      It appears to me that many of those who support EVs would support the government stepping in and creating mandates — after all, it is the only way EVs will gain any respectable market share — but those same individuals argue against this government intervention when it comes to biofuels. It is hypocrisy.

  20. Sorry typo I meant google Marin Katusa, energy analyst.

    I very much believe it is ICE cars are the expensive ones that needs subsidies. Even today the All-cost-in of the Model 3 is lower than popular ICE cars. With a BOM that is Much smaller than a ICE car, you will see how fast automakers zoom to EVs since the will require way less labor to build (and fewer parts ) and they will be unshackled from emissions issues.

  21. Here Ron & Tonto — I’m gonna help you two out.

    1) I know how to stop climate change. I’ve done it. I built 4-walls and roof and installed an HVAC unit… Now the “climate” is always perfect because it’s “controlled”.

    2) I’m a member of “public” too. It doesn’t do any “public good” to be running around jacking up artificially resources we use. It doesn’t do the “public” any “good” to be stealing their resources to do so. The only “good” from such criminal acts is a boost to your authoritarian and mindless ego.

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