CBO reports gas prices will hike under RFS; NFU, ethanol groups refute it
June 27, 2014 | 05:26 PM
The Congressional Budget Office has issued a report on the Renewable Fuel Standard that says it will cause gasoline prices to rise by up to 14 percent in 2017 if it is not changed, but the National Farmers Union and ethanol groups have criticized it.
Meeting the total volumes of advanced biofuels under the RFS would have significant effects on prices of transportation fuels, but have little effect on food prices, the report says.
Chandler Goule
The National Farmers Union called the report “deeply flawed.”
“CBO’s claim that repealing the RFS would reduce gasoline prices is simply false," said Chandler Goule, the NFU senior vice president for programs.
“The RFS has reduced consumer demand for oil, and the study fails to take that into account. It is unfortunate that CBO, which is supposed to be objective, released such a flawed study that does not take into account the reality of fuel markets.”
“Thankfully, the CBO study does acknowledge that the RFS is not driving up food prices,” Goule added.
Brooke Coleman
Brooke Coleman, executive director of the Advanced Ethanol Council (AEC) said the report is “not worth reading.”
“You cannot assess the impacts of the RFS without looking at the benefits of reducing consumer demand for gasoline and diesel fuel,” Coleman said.
“That’s the entire point of the RFS and the CBO simply states that ‘it did not account for that effect in this analysis.’ CBO reports are supposed to be impartial and objective, and therefore informative. This particular report appears to detail a fantasy world that does not inform the current debate.”
Growth Energy, which represents ethanol plant builders and operators, noted that “ethanol is trading at a dollar less than gasoline on the Chicago Board of Trade, and the CBO fails to acknowledge a 40-year history of volatile gas prices and simply ignores the effects that global turmoil has on fuel prices.”
“Put simply, increased domestic fuel production and a decreased dependence on foreign oil would help provide stability and reduce the massive price spikes consumers already are experiencing at the pump,” Growth Energy said.
But Reps. Reps. Bob Goodlatte, R-Va., Jim Costa, D-Calif., Peter Welch, D-Vt., and Steve Womack, R-Ark., said the report showed the RFS must reformed.
“The report underscores the hardship that full implementation of the RFS would have on everyday Americans, and the unfeasibility of reaching the full mandate by 2022,” the four said in a statement.
“EPA has stated it faces statutory challenges and inflexibilities in the law when implementing and reducing the Renewable Fuel Standard. This is highlighted by the fact that over six months into the calendar year, EPA has still yet to finalize renewable fuel obligations for 2014. It is vital that Congress provide a legislative fix to the RFS. Congress created this artificial ethanol market that is distorting the food and feed market, and Congress must provide relief from its unintended consequences.”
▪ Congressional Budget Office — The Renewable Fuel Standard: Issues for 2014 and Beyond
▪ — Summary
Meeting the total volumes of advanced biofuels under the RFS would have significant effects on prices of transportation fuels, but have little effect on food prices, the report says.
Chandler Goule
The National Farmers Union called the report “deeply flawed.”
“CBO’s claim that repealing the RFS would reduce gasoline prices is simply false," said Chandler Goule, the NFU senior vice president for programs.
“The RFS has reduced consumer demand for oil, and the study fails to take that into account. It is unfortunate that CBO, which is supposed to be objective, released such a flawed study that does not take into account the reality of fuel markets.”
“Thankfully, the CBO study does acknowledge that the RFS is not driving up food prices,” Goule added.
Brooke Coleman
Brooke Coleman, executive director of the Advanced Ethanol Council (AEC) said the report is “not worth reading.”
“You cannot assess the impacts of the RFS without looking at the benefits of reducing consumer demand for gasoline and diesel fuel,” Coleman said.
“That’s the entire point of the RFS and the CBO simply states that ‘it did not account for that effect in this analysis.’ CBO reports are supposed to be impartial and objective, and therefore informative. This particular report appears to detail a fantasy world that does not inform the current debate.”
Growth Energy, which represents ethanol plant builders and operators, noted that “ethanol is trading at a dollar less than gasoline on the Chicago Board of Trade, and the CBO fails to acknowledge a 40-year history of volatile gas prices and simply ignores the effects that global turmoil has on fuel prices.”
“Put simply, increased domestic fuel production and a decreased dependence on foreign oil would help provide stability and reduce the massive price spikes consumers already are experiencing at the pump,” Growth Energy said.
But Reps. Reps. Bob Goodlatte, R-Va., Jim Costa, D-Calif., Peter Welch, D-Vt., and Steve Womack, R-Ark., said the report showed the RFS must reformed.
“The report underscores the hardship that full implementation of the RFS would have on everyday Americans, and the unfeasibility of reaching the full mandate by 2022,” the four said in a statement.
“EPA has stated it faces statutory challenges and inflexibilities in the law when implementing and reducing the Renewable Fuel Standard. This is highlighted by the fact that over six months into the calendar year, EPA has still yet to finalize renewable fuel obligations for 2014. It is vital that Congress provide a legislative fix to the RFS. Congress created this artificial ethanol market that is distorting the food and feed market, and Congress must provide relief from its unintended consequences.”
▪ Congressional Budget Office — The Renewable Fuel Standard: Issues for 2014 and Beyond
▪ — Summary
