Washington—U.S. Senators Dianne Feinstein (D-Calif.) and Pat Toomey (R-Pa.) are working to repeal a law that drives up the cost of everything from gasoline to groceries.
The Feinstein-Toomey Corn Ethanol Mandate Elimination Act of 2015, introduced today, abolishes the corn ethanol mandate in the Renewable Fuel Standard (RFS). Sen. Jeff Flake (R-Ariz.) is also a cosponsor of the measure.
The RFS requires annual increases in the amount of renewable fuel that must be blended into the total volume of gasoline refined and consumed in the United States. However, the current statute effectively mandates the use of corn ethanol at the expense of other fuels. The requirement drives up the price of corn, products made from corn, livestock that feeds on corn, and many products on grocers' shelves and in refrigerators.
"The RFS requires fuel suppliers to blend millions of gallons of biofuels -- most often corn ethanol -- into the nation's gasoline supplies. It drives up gas prices, increases food costs, damages car engines, and is harmful to the environment," said Sen. Toomey.
"Under government mandates, refiners -- such as ours in Trainer, Pa. -- are forced to make a choice: increase the ethanol content in their fuel blends or pay a penalty by purchasing credits from energy traders. Once again, this is the government using corporate welfare to shower money on a favored industry and then send the bill to the general public. Labor leaders, businesses, and environmental groups have lined up to push back against this harmful regulatory regime. I am pleased to join with Sens. Feinstein and Flake to stop the RFS before more harm is done."
“The federal mandate for corn ethanol is both unwise and unworkable. Our bill addresses that with a simple, smart modification to the Renewable Fuel Standard program,” said Sen. Feinstein. “A significant amount of U.S. corn is currently used for fuel. If the mandate continues to expand toward full implementation, the price of corn will increase. According to the Congressional Budget Office, that would mean as much as $3.5 billion each year in increased food costs. Americans living on the margins simply can’t afford that.
“Our infrastructure has a ceiling for the amount of corn ethanol that can be used, and we're rapidly approaching it. Companies are physically unable to blend more corn ethanol into gasoline without causing problems for many gas stations and older automobiles. The mandate also pits corn ethanol against other renewable fuels, which has stunted the growth of environmentally-friendly advanced biofuels like biodiesel and cellulosic ethanol. Once the mandate for corn ethanol is gone, the RFS program will be able to focus on those fuels that best reduce greenhouse gas emissions and don’t compete with our food supply.”
Said Sen. Flake: "In 2005, Congress bought into the corn ethanol mandate for billions of dollars, and taxpayers have been stuck with a lemon ever since. Congress can no longer justify a policy that props up the ethanol industry at the expense of taxpayers, consumers, the hungry, and the environment. I am pleased to join my colleagues on both sides of the aisle in supporting the full and immediate repeal of the corn ethanol mandate."
Background: The Renewable Fuel Standard, first enacted in 2005, required refiners and blenders to use 18.15 billion gallons of renewable fuel in 2014. More than 14 billion gallons of this total will be met by the use of corn ethanol, a level that will increase in subsequent years.
There are two key problems with continuing to mandate the consumption of more and more corn ethanol each year:
- Corn consumption: Approximately 40 percent of the U.S. corn crop is now used to produce ethanol, artificially inflating food and feed prices while damaging the environment.
- Blend wall: As gasoline consumption declines, refiners face a "blend wall" when the RFS mandate exceeds the limit at which ethanol can be blended into the fuel supply, determined to be 10 percent of total gasoline consumption.
Attached is a letter from numerous groups supporting this legislation.