Fixing the RFS Pothole

One measure of good government is how easy it is to spot the long term benefits of a policy or law.  This is particularly true when it comes to being good stewards of Americans’ tax dollars. If a local government is going to spend $1,000 to fill its potholes, then the measure of whether or not the money is spent wisely should be how long the road remains smooth and level.

In Washington, where not every decision levels the potholes, there is an existing policy called the Renewable Fuel Standard (RFS).  The RFS was created to help increase demand for renewable fuels and reduce greenhouse gas emissions by requiring a certain percentage of ethanol and biofuels be blended into automobile gasoline.  Blending the renewable fuels into gasoline helps refiners meet certain octane requirements. You probably didn’t even know this was a law, and you may have even wondered why there are E-10 signs at the gas pump, which designate the percentage of ethanol mixed with the gasoline.

The RFS has created its own set of potholes. My family owns a farm in New Richmond where we raise American buffalo, which has given me some firsthand experience dealing with an unintended consequence of the RFS.  As ranchers, we pay close attention to fluctuations in fixed costs. One example is the cost of feed.  The RFS has increased the cost of feed due to the increased demand for corn, which is used to produce ethanol. However, the worst part is the uncertainty. The Environmental Protection Agency (EPA) has repeatedly failed to issue the renewable volume obligations (RVOs) for the RFS on time, and it’s impossible to predict how the agency’s rules will affect the market.

On principle, I believe in free markets, and in keeping the government small and control as local as possible.  The EPA, an unelected federal agency, shouldn’t have the power to control the fate of the corn, ethanol, and Ag industries in Ohio. Unfortunately, the situation will only get worse in 2023, when the EPA takes complete control of the RFS and will have the authority to cut corn ethanol out of the program.

Allowing the EPA to take full control of the RFS is a great example of letting control slip away from state and local decision makers and into the hands of the cadre of Washington, DC based lawyers and bureaucrats who probably haven’t spent much time in Southwest Ohio.  To me, this has pothole public policy written all over it.

The EPA is well-known to people who work in and around Ohio’s agriculture and energy industry because of recent overburdening regulations it has put in place. For example, the Waters of the United States rule regulates the puddles in farmers and ranchers backyards.  The EPA’s regulations have also devastated the coal industry, which helps us generate affordable electricity, and the oil industry which has tapped into Utica Shale to find and advance natural gas.

For these reasons, I believe we should cut the EPA out of the RFS process entirely in 2023 and allow for an open, free, and stable fuel market, in which consumers can determine the type of fuel they want to put in their vehicles. The corn ethanol market is an established, independent and sustainable market that should not be dictated by the EPA.  Ohio’s lawmakers should take a long, hard look at the RFS and realize a return to the free market is the best way to smooth out this pothole for the corn, ethanol, and Ag industry.