A $2.2 billion curse on the American economy.
This is the estimated cost to refiners for having to comply with the government’s program forcing renewable fuels on Americans.
This cost to refiners for buying RINs (Renewable Identification Numbers) is actually a tax on Americans.
The Oil and Gas Journal (OGJ) provided details on how this government program is costing Americans billions of dollars. Money that could be better spent on infrastructure that benefits everyone, not a few.
The Renewable Fuel (Volume) Obligation (RVO) is determined by the EPA annually, and establishes the obligation of refiners.
Quoting from OGJ, “The RVO is expressed in RINs, which attach to every gallon of renewable fuel produced at rates that vary with fuel type. One gallon of corn ethanol, has 1 RIN attached to it. If the producer sells the ethanol, the RIN goes with it.”
When a refiner blends ethanol with gasoline the RINs are separated and go toward the refiner meeting its RVO obligations.
If the refiner has too few RINs to meet this obligation, the refiner must buy the RINs from the open market.
The entire process is extremely complicated. Problems associated with the corrosive nature of ethanol limits where gasoline and ethanol can be mixed, i.e., blended, which creates additional costs.
There is also the problem of cellulosic ethanol not being available. Not only, is it not available, but it’s expensive.
Cellulosic ethanol is another rathole down which the government is throwing tax payer dollars.
The EPA explains, from its website,
“Congress created the renewable fuel standard (RFS) program in an effort to reduce greenhouse gas emissions and expand the nation’s renewable fuels sector while reducing reliance on imported oil.”
Here we have a program that is costing tax payers an exorbitant amount of money, while accomplishing very little, if anything.
There is no need, for example, to reduce reliance on imported foreign oil. Oil imports are decreasing due to increased production of shale oil.
It’s been demonstrated that ethanol doesn’t reduce greenhouse gas emissions, and it’s becoming ever more clear that GHG are not the cause of climate change.
It expands the renewable fuel sector when it’s uneconomic and unnecessary.
And, it uses corn, a food, to produce a product that will be burned. Using corn to make ethanol is a travesty against humanity.
The government created this monster of a program and encouraged farmers to participate in it.
Since the program is unnecessary, it needs to be disbanded in a way that minimizes harmful impacts on farmers.
The RFS program is an excellent example of government interference with free markets. The RFS program harms everyone by wasting tax payer money and encouraging farmers to invest in a useless, and some could say prejudicial activity, i.e., corn for ethanol.
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Nothing to Fear explains why CO2 isn’t to be feared. Chapter 15, An Alternative Hypothesis, describes Dr. Svensmark’s hypothesis on cosmic rays.
Nothing to Fear is available from Amazon and some independent book sellers.
Link to Amazon: http://amzn.to/1miBhXy
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Another wonderful example of a government/globull warming boondoggle . In addition to all the “wonderful” bs you’ve listed don’t forget all the diesel fuel required to grow the corn.
Thanks for comment, and adding one more thing that’s wrong with ethanol program.
Donn,
I read you book earlier this year. Big Fan. Pragmatic looks at energy and environmental are needed and all professionals working in energy or environmental management should read it.
If folks don’t believe you, let them look at GAO testimony to Congress on 12/1/16 by reading the .pdf at http://www.hsgac.senate.gov/download/rusco-testimony_rafm-2016-12-01.
The commenters’ note on the accounting of GHG due to fueling farm equipment is captured in the study released in August by John DeCiccio of University of Michigan at http://link.springer.com/article/10.1007/s10584-016-1764-4. When you factor in production energy for ethanol, it’s a total bust.
Now for the ultimate zinger. Donn, you need to double your $2 Billion dollar figure to $4 Billion if you factor in the fraud associated with the program since 2010. The program has been badly run by EPA because it uses environmental scientists and policy analysts to design, run and secure a financial marketplace better run by CPA’s and business analysts. There are no reliable protocols for auditing and verifying information, even anything close to the so called Carbon accounting programs in other sectors. A scant 10-pager and PowerPoint webinar in the spring of 2010 was all that was provided.
Two rounds of EPA Inspector General routings since 2012, the development by industry of the Quality Assurance Plan (QAP) program that didn’t get taken seriously by EPA until 2014, and even an industry Quality Management System certification program BQ-9000 have not stopped the ongoing printing of RFS currency by even prominent bio-energy providers like Chemoil, Gen-X, Western Dubuque. Take a read of Doug Parker’s report. He is the recently retired chief enforcement officer at EPA. His report lays it all out regarding EPA’s misalignment with the monster they created. Download it at his company’s website at http://www.earthandwatergroup.com/wp…/Expert-Report-Fraud-in-the-RFS-9-4-16-.pdf.
$4 Billion and growing with every fill up at the pump, and every light switch turned on. Over twenty years since the Energy Security Act of 2005 was put in motion, under both Democrat and Republican administrations and we haven’t pulled a single pound of CO2 equivalent out of the air to protect future generations. Energy security? Let’s talk about shale, let’s talk about next exporter and growing GNP. Let’s talk about anything that is positive without having a huge invoice due.
Great comments. Also thank you for your comments about Nothing to Fear. Greatly appreciated.