The Environmental Protection Agency wants to raise the amount of biofuels in our gasoline once again, but an energy industry executive says the move could severely damage most of our vehicles, reduce the amount of energy per gallon and add to the national economic uncertainty.
The Obama EPA recently unveiled its proposal for the 2017 Renewable Fuel Standard. The administration says the call for additional biofuels is part of its ongoing effort to reduce dependence upon fossil fuels and develop cleaner burning energy sources.
But that’s not how the energy industry sees it at all.
“The new rule continues to push us toward breaching the blend wall. That is our big concern here and that is reaching above 10 percent ethanol in the fuel mix. ,” said American Petroleum Institute Downstream Group Director Frank Macchiarola.
He says on paper the new Renewable Fuel Standard, or RFS, would still keep biofuels below the 10 percent threshold, but demand levels could actually drive the percentage above 10 percent. He says that could be a death sentence to the engines of most personal vehicles in the U.S.
“What AAA has said is that up to 90 percent of the vehicles on the road are not compatible with higher-blended ethanols such as E15. The more you push toward that, the greater the potential threat is to your fuel system and to your engine,” said Macchiarola.
Far from embracing higher biofuel levels, the American Petroleum is asking Congress to significantly lower them or scrap the RFS altogether. Macchiarola says the original legislation came in response to conditions that no longer exist.
“We’re asking Congress to repeal or significantly reform the RFS. Our basic argument here is that when the RFS was passed ten years ago that the energy world looked very different here in the United States,” said Macchiarola.
He says the energy conditions in the U.S. have effectively made a 180 degree shift in the past decade,
“We were a net importer of energy. We were increasing our dependence on foreign oil. Our production levels had flattened and were in decline,” said Macchiarole. “Fast forward ten years, we’ve had this shale revolution in both oil and natural gas and we’re the world’s leading producers of energy.”
As if the potential damage caused by breaching the blend wall weren’t concerning enough, Macchiarola says there’s a deeper economic downside too.
“The one thing about this mandate that is certain is the uncertainty every year. There’s nothing more damaging to economic growth, in my judgment, than an uncertain business environment,” said Macchiarola.
He says the uncertainty will run from the refineries to automakers to “anybody who is looking at input costs.” And consumers are not immune either.
“On the consumer side it creates uncertainty at the pump,” said Macchiarola, who points to a Congressional Budget Office report showing that higher biofuel content could lead to a 26-cent hike per gallon of gas.
And all for less energy.
“Those higher-blended ethanol fuels have less energy content. That means people are driving less between each stop at the gas station,” said Macchiarola.
There is legislation underway on Capitol Hill that would forbid the EPA from ever exceeding the blend wall. It’s sponsored by Rep. Bill Flores, R-Texas, and Rep. Peter Welch, D-Vermont. Macchiarola anticipates a bipartisan consensus on the issue because interests on both sides see problems with the RFS proposal.
“Environmental groups, both from an air emissions standpoint and a land use standpoint, are really concerned about a proliferation of corn-based ethanol,” said Macchiarola.