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August 2017 Issue

RFA: Happy Anniversary to the Original RFS

August 11, 2017 •

By Bob Dinneen, President and CEO of the Renewable Fuels Association

 

Twelve years ago today, I was in a canoe in the middle of Lake Winnipesaukee, New Hampshire, celebrating the signing of the single most successful clean fuels policy in our nation—the original Renewable Fuel Standard (RFS).

 

On August 8, 2005, President George W. Bush signed the Energy Policy Act of 2005 into law, which included the RFS. The signing ceremony for the Domenici-Barton Energy Policy Act of 2005 was held in New Mexico to honor then-Senate Energy and Natural Resources Chairman Pete Domenici (R-New Mexico). Except I was on my annual summer vacation with my family. The cell service on the island wasn’t good then, so I had to take the canoe out to the middle of the lake and await word of the bill signing. Once I received confirmation that indeed the RFS had become law, I whooped and celebrated to all within earshot that our country now recognized the numerous benefits that biofuels provided to consumers.

 

The original RFS called for up to 7.5 billion gallons of biofuel by 2012. Because of the tremendous growth and the numerous benefits, Congress expanded the RFS in 2007, requiring oil companies to blend increasing volumes of renewable fuels with gasoline and diesel, culminating with 36 billion gallons in 2022. In the 12 years since its existence, the RFS has made tremendous progress toward its goals of energy security, clean air and boosting local economies.

 

The Renewable Fuels Association (RFA) recently issued an analysis on the progress we have made since the original RFS was enacted. Specifically, the analysis compares key data points and indicators from 2005 and 2007 to data from 2016.

 

Among the highlights:

  • The number of operational U.S. ethanol plants has grown from 81 in 2005 to 213 in 2016, while ethanol production has grown from 3.9 billion gallons to 15.3 billion gallons, a nearly 300% increase;
  • U.S. ethanol industry jobs grew 121%, from 153,725 in 2005 to 339,176 in 2016, and the value of the industry’s output quadrupled from $8.1 billion to $32.8 billion;
  • U.S. corn production has grown from 11.1 billion bushels in 2005 to 15.2 billion gallons in 2016, a 36% increase, while average yields grew from 147.9 bushels per acre to 174.6 bushels per acre;
  • U.S. petroleum net import dependence has dropped from 60% in 2005 to 25% in 2016, and would have been 33% last year without ethanol;
  • The number of retail gasoline stations offering flex fuels like E85 to flexible fuel vehicles (FFV) grew 728% from 2005 to 2016, while the number of FFVs on the road grew 239%; and
  • Ethanol’s role in cleaning the air has increased, with notable reductions in emissions of both greenhouse gases and criteria pollutants.

 

The Environmental Protection Agency (EPA) recently issued its 2018 RFS Renewable Volume Obligation (RVO) proposal, maintaining the conventional biofuel RVO at 15 billion gallons, as required by the statue. I was pleased to see the conventional biofuel requirement maintained; however, the agency is proposing to cut the cellulosic biofuel requirement to 238 million gallons. This reduction may send a negative signal to the marketplace, and we believe EPA has erred on the side of pessimism regarding the potential for significant growth in cellulosic ethanol commercialization.

 

Consumers only see the full benefits of the RFS when EPA maintains the policy as intended by Congress. The tremendous gains we have already seen in the 12 years since the original RFS was signed into law will only continue if the program is allowed to achieve its full potential, giving consumers greater choice at the pump, while cleaning the air and boosting local economies.

 

The comment period on EPA’s 2018 RFS RVO proposal ends on August 31. The RFA will submit comments on how the agency can ensure a strong RFS, enabling consumers to take advantage of its numerous benefits. But in the meantime, it’s worth celebrating today’s anniversary and how far we’ve come in the past 12 years.

 

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