The Renewable Fuel Standard (RFS) is a clumsy and misguided command and control mechanism that requires an arbitrary level of ethanol to be blended into the nation’s transportation fuel supply. The RFS has several unintended consequences that harm almost all sectors of the economy and saddle American taxpayers with higher fuel costs and food prices. But the harm doesn’t stop there.
The RFS forces refineries to purchase artificial and costly credits called Renewable Identification Numbers (RINs) to comply with the program. In other words, energy providers are forced to pay extra money to the government for the privilege of refining fuels that we all need and use. These RIN payments increase the fuel cost to consumers but do nothing to benefit consumers. They are effectively just another energy tax saddled onto consumers.
Many independent refiners have reported spending more on RINs than all other operational costs. Likewise, the high costs of RINs have forced the closure and bankruptcy of various refineries.
When our energy infrastructure is diminished through regulatory overreach, we all pay higher prices. Some traditional refineries have closed and converted to so-called renewable diesel plants. But these plants make 70 percent less fuel, and they’ve reduced their workforce by almost 90%. This means less supply, higher prices, and fewer jobs. That’s a lose-lose-lose.
RINs cost consumers 15 to 30 cents per gallon when they go to the gas station to fill their tanks. However, the costs are not limited to consumers' money at the gas pump. Consumers who heat their homes with heating oil saw an average of almost $2,000 per year higher costs to heat their homes, according to the Energy Information Administration (EIA). But the increased costs forced by RINs don’t end there.
Everything we buy is transported and requires fuel to be delivered to the store or our front door. So, everything we purchase now costs more, thanks to the RFS and RINs.
Some might argue that the higher prices imposed upon us by RINs are worth it because they encourage increased ethanol blending. That would be false. Even with the RFS mandate, the national ethanol blending rate has barely budged. Rather than producing American fuel, promoting American jobs and securing American energy supply, we import billions of gallons of foreign biodiesel to avoid the RFS’s overly aggressive requirements. So, not only are we paying more for everything thanks to the RFS, but we’re also harming American farmers and American energy security.
It is unbelievably extreme to use government mandates to weaken America and make it less safe and less prosperous. The RFS is a powerful example of the harm that D.C. bureaucrats do to Americans and the American economy when they impose misguided government mandates upon free markets.
Like all government regulations, someone has figured out how to manipulate the RFS to profit from it. While the public pays the price, some giant oil blenders and Wall Street traders have figured out how to use the RIN system to pad their pockets. This absurd program is essentially a government giveaway to the world’s largest oil companies and Wall Street traders—and it all comes at the expense of domestic refiners, American workers, and American consumers.
Last year, President Biden received pleas from thousands of refinery workers and other union workers in Pennsylvania, Ohio, Delaware, and other states, urging him and his administration to fix the costly and oppressive nature of the RFS and save America’s domestic energy refining sector. Biden ignored them. Even with the political pressure to lower energy costs and jumpstart a lagging economy, Biden doubled down on his anti-energy and anti-American policies.
Joe Biden loves to tell everyone he is the most pro-worker and pro-union president in American history. Still, it is instructive that he stood with the ethanol lobby and not with American workers, who could well decide the presidency in 2024. That may explain why an increasing number of union workers are saying that they won’t be supporting Biden in 2024. They want an America that is prosperous, secure, and not dependent upon other powers for our energy needs.
President Biden famously promised to declare war on and end America’s oil and gas industry. That may be one of the few promises he’s keeping. Conservatives must stand up to Biden and his costly and harmful energy policies, including the insanity imposed by the RFS. It’s time to put American families, farmers, and energy security first.
