Food and Energy Prices Could Decrease if Congress Makes the Right Move
We all have to eat and use various forms of energy to survive and live well in America. So should the quotas and rules and regulations handed down from Washington make it harder for us to do so? No! But that’s what’s happening.
Did you know the law currently dictates to Americans that there must be 15 billion gallons (and no more) of corn-based ethanol and another 21 billion gallons of non-corn biofuels in the nation’s fuel supply by 2022?
If that sounds absurd to you, it’s because it is.
Conservatives certainly don’t want Americans to have to pay more for food and energy. In order to decrease costs, Heritage’s Nicolas Loris suggests that Congress should completely end the Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS).
Loris demonstrates how messy things get when Washington bureaucrats control production. At times “renewable fuel production dramatically underperforms” while in other cases “too much renewable fuel may be required. The following example demonstrates how ridiculous the government’s quotas are:
the original quota created in 2007 for cellulosic ethanol for 2013 was 1 billion gallons. The EPA substantially lowered the target to 6 million gallons, or 0.6 percent of the initial production goal. Cellulosic ethanol has only just recently obtained commercial viability, and so far, only 48,846 gallons have been produced in 2013—0.8 percent of the 6-million-gallon target.
Is all of this just a nuisance, though? Are we really being affected at home? Yes.
Because the RFS requires that fuel blenders use biofuels regardless of the cost, most Americans are made worse off through higher food and fuel expenses. The higher costs paid by American families benefit a select group of special interests that produce renewable fuels.
Much of the mandate is met with corn ethanol. Since corn is a staple ingredient for many foods and an important feedstock for animals, many in the food industry—including cattle and chicken farmers and restaurant associations—have expressed concern regarding the mandate’s effect on food prices.
And it’s not just food that’s becoming more expensive. It’s the fuel we use to drive.
The RFS also costs Americans as taxpayers and drivers. Ethanol has lower energy content than gasoline, and although fuel that is 85 percent ethanol has a lower price at the pump, when adjusting for its lower British Thermal Units, it is actually more expensive. Taxpayers have also shelled out $45 billion over a 30-year time frame for ethanol, and while the targeted tax credit for ethanol expired, subsidies remain in place for other biofuels.
Clearly, repealing the RFS is the only real reform that will help Americans.