Solar Freeloader

Solar Loaf 600 AEA

WSJ Op-Ed: Time to Repeal the RFS

Today, American Energy Alliance President Thomas Pyle penned an op-ed in the Wall Street Journal on the Renewable Fuel Standard. In the piece, Pyle makes the case for repealing this broken and misguided policy. Below is the text from the op-ed:

At the Iowa Agriculture Summit earlier this month, most of the prospective Republican presidential candidates embraced the renewable-fuel standard, one of the worst examples of corporate welfare in America. This federal mandate props up the U.S. ethanol industry by forcing refiners to blend biofuels into gasoline. Despite the fact that it is an obvious business handout, White House hopefuls rarely attack the standard, lest they harm their chances of winning the Iowa caucuses.

Yet there’s a promising shift under way. A bipartisan group of legislators in Washington, D.C., including Sens. Pat Toomey (R., Pa.) and Dianne Feinstein (D., Calif.), recently introduced a bill to repeal the corn-ethanol portion of the RFS. The approach of Rep. Bob Goodlatte (R., Va.) is better: He has introduced legislation that would repeal the RFS outright. Neither proposal will be enacted, but they reflect a growing consensus that the RFS isn’t working.

When Congress enacted the RFS in 2005, its backers argued it would combat America’s dependence on foreign oil. Today, thanks to huge increases in domestic oil production, the U.S. is significantly more energy independent. In 2005, domestic oil accounted for 40% of total U.S. oil consumption. Now it constitutes three-quarters.

Unfortunately, the mandate has created a number of new problems thanks to its exceptionally poor design. The standard requires refiners to blend volumes—rather than percentages—of biofuels into gasoline based on fuel supplies and the EPA’s annual targets. So when gasoline consumption drops, refiners must increase the percentage of biofuels in the blend.

This is happening now: Gasoline consumption peaked in 2007 and has since dropped 6%. At today’s reduced consumption levels, complying with the renewable-fuel standard would require blending gasoline that contains more than 10% ethanol. That is higher than most cars are certified to use, according to AAA, and it would wreck lawn mowers, weed eaters, boats and motorcycles. The only reprieve has been bureaucratic ineptness at the EPA, which has failed to enforce the mandate and set thresholds for two years in a row.

At the same time, the RFS increases fuel prices. According to a 2014 report by the Congressional Budget Office, the mandate could raise gasoline prices by up to 27 cents between now and 2017. Moreover, ethanol is less energy dense than gasoline, which means that fuel economy drops—and drivers must fill up the tank more often—as ethanol content rises.

The renewable-fuel standard also makes it harder for families to put food on the table. Thanks to the mandate, a large and growing percentage of corn, soybeans and other crops is now used in biofuels production rather than for human consumption. Consider corn: In 2005, 15% of the nation’s corn harvest was used for fuel; today it is 40%. This makes corn more expensive. A 2012 study by PricewaterhouseCoopers found that the RFS raises costs for chain restaurants by $3.2 billion a year. Those costs are passed on to families in higher prices.

Even the national environmental lobby is now expressing concerns. The World Resources Institute recently found that a gallon of ethanol—throughout its journey from stalk to pipe—emits more carbon dioxide than oil, which “undercuts efforts to combat climate change.” Another new report from the University of Michigan’s Energy Institute reaches a similar conclusion. Researchers reviewed more than 100 papers on the environmental impact of biofuels and found that ethanol offers “no significant increase in the amount of carbon dioxide being removed from the atmosphere.” The conclusion: “Therefore, there’s no climate benefit.”

The only real winners are the ethanol producers, who have found a guaranteed source of income. From 2007 to 2013, the corn-ethanol industry spent $158 million lobbying the federal government on subsidies, tax credits and mandates, including the renewable-fuel standard, according to an analysis of public filings by Taxpayers for Common Sense. This is on top of $6 million in campaign contributions to federal candidates between 2008 and 2014. That money isn’t being spent to help corn and soybean farmers in rural America, but rather to secure government handouts.

These special-interest groups are, once again, planning to leverage the outsize influence of the Iowa presidential caucuses to pressure 2016 hopefuls into supporting the RFS. In January, Iowa Renewable Fuels Association Executive Director Monte Shaw promised a multimillion-dollar ethanol lobbying campaign that is “probably going to be the most aggressive issue advocacy effort people have ever seen in the history of the Iowa caucuses.” Sen. Ted Cruz (R., Texas) is the only prospective candidate to unequivocally oppose the standard.

The renewable-fuel standard is a corporate giveaway that makes food and fuel more expensive for American families. If presidential candidates won’t vow to repeal it, then it is incumbent upon Congress to tear it out by its roots.

Mr. Pyle is the president of the American Energy Alliance.

AEA Supports Effort to Slam the Door on a Federal Carbon Tax

WASHINGTON — Today, the American Energy Alliance issued a key-vote alert for amendment #350 to the Senate’s 2016 budget resolution. The amendment, introduced by Senator Roy Blunt (R-Mo.), would issue a point of order against any legislative proposal to tax carbon dioxide.

“Senator Blunt’s amendment is a commendable effort to finally slam the door on a federal carbon tax,” said AEA President Thomas Pyle.

“Modern life depends on affordable and reliable energy. A carbon tax would raise energy costs on all American families, disproportionately impacting the poor and those on fixed incomes. The American people recognize these dangers and will hold their lawmakers accountable for supporting a carbon tax, as former Sens. Mark Begich and Kay Hagan learned the hard way.”

AEA supports Senator Blunt’s amendment and will include it in our American Energy Scorecard. Below is the text of the key-vote alert:

This week, the Senate will vote on amendment #350 by Senator Blunt to concurrent resolution S. Con. Res. 11, the fiscal year 2016 budget. The amendment would issue a point of order against any legislative proposal to tax carbon dioxide, thus making it more difficult for Congress to impose a costly and harmful carbon tax on the American people.

A carbon tax would have a disastrous economic impact on American families. For instance, a $25 per ton tax that rises 5 percent each year, as some lawmakers have proposed, would reduce the income of a family of four by $1,900 per year and raise that family’s energy costs by $500 per year (not even counting gasoline), according to the Heritage Foundation. It would also raise gasoline prices by up to 50 cents per gallon, negating many of the economic gains offered by affordable gasoline.

Taxing carbon dioxide would also surely destroy jobs and slow economic growth. An analysis by the National Association of Manufacturers found that a carbon tax could result in lost worker income equivalent to 21 million jobs by 2053. Manufacturing production could decline by as much as 15 percent in energy-intensive sectors, according to NAM. These losses would come as many families are still struggling to recover from the economic recession.

Some proponents suggest implementing a carbon tax while reducing other taxes elsewhere—Congress shouldn’t be fooled. Such efforts to make a carbon tax “revenue neutral” are not realistic and run counter to the stated goals of most carbon tax advocates, who prefer to use the revenues to increase spending, not lower taxes.

Taxing carbon dioxide amounts to a tax on modern life. Nearly everything we do depends on energy sources that emit carbon dioxide. Moreover, a carbon tax would have a disproportionate impact low-income families, who spend a higher share of their income on energy costs. Australians learned this lesson the hard way, scrapping their failed carbon tax experiment last year. Congress would do well to learn from their mistakes.

The American Energy Alliance supports this amendment and will include it in our American Energy Scorecard. YES IS THE PRO-ENERGY, PRO-WORKER, AND PRO-HUMAN FLOURISHING VOTE.

Click here to view the key-vote alert.

Click here to view the American Energy Scorecard.

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A Corny Way to Go

Corny 600 AEA

We think Jay Leno said it best:

As someone who collects old cars, and keeps them up religiously, I am now replacing fuel-pressure regulators every 12 to 18 months. New cars are equipped with fuel lines that are resistant to ethanol damage, but with older cars, the worst can happen—you’re going down the road, and suddenly your car is on fire.

[…]

Ethanol will absorb water from ambient air. In a modern vehicle, with a sealed fuel system, ethanol fuel has a harder time picking up water from the air. But in a vintage car, the water content of fuel can rise, causing corrosion and inhibiting combustion.

It gets worse. Ethanol is a solvent that can loosen the sludge, varnish and dirt that accumulate in a fuel tank. That mixture can clog fuel lines and block carburetor jets.

Blame the Renewable Fuel Standard.

It’s time to End the RFS.

Coalition Urges Congress to Repeal the RFS

WASHINGTON — The American Energy Alliance joined today with 16 other organizations in opposition to the Renewable Fuel Standard. In a letter to the House of Representatives, the coalition urges Members to co-sponsor H.R. 703, a bill introduced by Rep. Bob Goodlatte to repeal the Renewable Fuel Standard. Below is an excerpt from the letter:

We, the undersigned, write to urge you to co-sponsor H.R. 703, a bill introduced by Representative Goodlatte to repeal the Renewable Fuel Standard. This legislation deserves your full support. We, collectively and individually, continue to believe the best reform to this failed government mandate should be to repeal it. Repealing this mandate would bring certainty to the fuel markets and eliminate the harmful impacts this government program has had on businesses and consumers.

The RFS harms almost all sectors of the economy and saddles American taxpayers with higher fuel costs and higher food prices. Apart from increased food prices – which have been confirmed by both the United States Department of Agriculture and the World Bank – the RFS increased the costs of gasoline and diesel. A recent Congressional Budget Office report concluded that complying with the mandated volume levels would increase the price of diesel by 30 to 51 cents per gallon and regular gasoline by 13 to 26 cents by 2017.

We also want to express our concern over efforts to reform the RFS that fall short of complete repeal. Representative Goodlatte has also introduced H.R. 704, a bill that would primarily tackle the corn ethanol portion of the mandate. Legislation that would simply address the corn-based portion of the mandate is commendable, but it is a half-answer. A repeal of the corn-based ethanol mandate that leaves the other three mandates that exist in the statute – biodiesel, cellulosic, and advanced biofuels – in place would simply result in the substitution of other alternative fuels for the current reliance on corn-based ethanol.

The coalition letter will remain open for additional signers.

Click here to read the full coalition letter.

 

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EPA’s WOTUS Rule “Insults Property Owners”

Environmental Protection Agency (EPA) Administrator Gina McCarthy delivered a speech at the National Farmers Union this week in which she tried to assuage doubts over a proposed rule to greatly expand the agency’s authority to regulate waters covered under the Clean Water Act. The proposal, known as “Waters of the United States,” has drawn the ire of farmers, ranchers, property owners, and local governments, who fear the vague language contained in EPA’s rule could result in the regulation of “puddles, ponds, ditches” and even land that is only wet when it rains.

The Heritage Foundation’s Daren Bakst explains how McCarthy’s speech “insults property owners” by downplaying the far-reaching implications of EPA’s proposal:

Under the proposed rule, the EPA and Corps would deem nearly any type of water to be jurisdictional [meaning regulated by EPA]. For example, the new proposed rule would regulate all ditches, except in narrow circumstances. The rule would apply to tributaries that have ephemeral flow and depressions in land that contain water only when it rains. Further, the rule is so vague that property owners probably should assume a water body is covered under the law, unless it falls under one of the limited exceptions in the rule.

This overreach means that property owners will be required to secure far more permits than ever before. McCarthy makes it sound as if this isn’t a big deal because, after all, according to her, these individuals and businesses just want to pollute. Even the connotation of pollute is misleading because it suggests, for example, some business dumping toxic waste in a pristine water. Her statement is both misleading and insulting.

The Waters of the United States rule is just one more example of overreach from the federal government. To read Mr. Bakst’s full piece, click here.

USA Today Tears Into Flawed RFS

The barrage of criticism targeting the Renewable Fuel Standard is showing no signs of stopping. Just last week, the The New York Times and The Wall Street Journal took aim at the costly and flawed federal biofuel mandate.

Now, on the heels of the recent Iowa Ag Summit, where numerous prominent Republican presidential candidates kowtowed to the powerful ethanol lobby, USA Today has weighed in on the government’s ethanol directive. Their take? End the ethanol mandate. Here’s an excerpt from the piece:

The RFS, which requires retailers to sell a 10% ethanol blend or pay into a convoluted subsidy system, imposes major burdens on consumers. A gallon of ethanol is more expensive than a gallon of gasoline ($2.43 vs. $1.73 wholesale) and gets only about two-thirds the mileage.

This forces motorists to pay $10 billion a year more at the pump, according to Robert Bryce of the Manhattan Institute. That’s more than a quarter of the $38 billion raised by the federal gasoline tax. Then consumers get hit a second time at the supermarket, where rising corn prices drive up the cost of everything from beef to cereal.

Meanwhile, the argument that energy security demands a home-grown, “renewable” fuel is no longer viable thanks to new oil and gas drilling techniques and advances in wind and solar. In fact, the ethanol makers who once wrapped themselves in the flag are now shipping their product overseas.

Another rational — ethanol’s status as a “clean” fuel — was always a farce. While a gallon of ethanol emits fewer greenhouse gases than a gallon of gasoline, it is far dirtier after accounting for the energy used to till and fertilize the land used to produce it.

If these weren’t enough reasons to revisit the mandate, consider this: Fuel use has been dropping thanks to more efficient cars and other factors. That has made it hard to unload mandated ethanol quotas without going above a 10% blend, something Detroit says its cars can’t handle.

The solution is obvious: Just end the mandate — notwithstanding the kowtowing of politicians traipsing through Iowa.

You can read the rest of USA Today’s editorial here.

Former Obama Law Professor Eviscerates EPA

Laurence Tribe is a Harvard Law Professor who has described President Obama as “the best student I ever had” and donated to his political campaigns. It might come as a surprise, then, to learn that Professor Tribe also believes the foundation of the Obama administration’s anti-coal agenda is unconstitutional.

Testifying before Congress this week, Tribe condemned the Environmental Protection Agency’s (EPA) proposed carbon dioxide rule for existing power plants as a “constitutionally reckless mission” and a “power grab.” In written testimony, Tribe explains how the EPA’s proposal “offends democratic principles” in favor of regulatory fiat:

EPA’s plan represents an unprecedented attempt to change how electricity is generated, transmitted, and consumed throughout the United States…EPA’s plan will force States to adopt policies that will raise energy costs and prove deeply unpopular, while cloaking those policies in the Emperor’s garb of state “choice” – even though in fact the polices are compelled by EPA. Such sleight-of-hand offends democratic principles by avoiding political transparency and accountability.

Tribe’s oral testimony was even more pointed. He said EPA’s plan would make states “marionettes dancing to the tune of a federal puppeteer.” Tribe believes EPA’s plan runs afoul of the Fifth and Tenth Amendments and the Clean Air Act.

Tribe’s testimony echoes earlier comments submitted to EPA. In those comments, Tribe describes the proposed rule as “remarkable example of executive overreach” and called on EPA to withdraw the rule. As Tribe explains, EPA is misinterpreting a key section of the Clean Air Act to seize authority it does not have under the law.

Essentially, Tribe explains EPA does not have the authority to regulate power plants under both Section 112 and 111(d) of the Clean Air Act—the agency must choose one, and it’s already regulating mercury emissions under Section 112. Thus, EPA’s proposal to also regulate carbon dioxide emissions from those same power plants under Section 111(d) would violate the Clean Air Act. Even if EPA’s proposal didn’t violate the Clean Air Act, Tribe contends the courts will invalidate the rule on constitutional grounds.

Tribe concludes his written testimony:

EPA is attempting an unconstitutional trifecta: usurping the prerogatives of the States, Congress and the Federal Courts – all at once. Burning the Constitution should not become part of our national energy policy.

Click here to read Tribe’s full testimony.

On House Budget: Don’t Bail Out HTF w/ Gas Tax Hike

WASHINGTON — American Energy Alliance President Thomas Pyle issued the following statement on the House’s FY2016 budget:

“The House budget is a step in the right direction toward encouraging more domestic energy development and winding down the Obama administration’s reckless green energy spending. The U.S. is the number one oil and gas producer in the world despite the administration’s policies aimed at blocking energy production on federal lands and propping up expensive renewable energy schemes.

“Whatever ‘sensible reforms’ Congress is planning to fix the Highway Trust Fund, lawmakers should avoid raising the federal gasoline tax to finance this broken system. The Highway Trust Fund shouldn’t get a bailout on the backs of American families.

“This budget proposal is a good start, but Congress must follow through on its promises—not simply pay lip service to sensible energy policy.”

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WSJ Op-Ed: Fossil Fuels Will Save the World

Energy poverty is a foreign concept for the majority of Americans. But it is a stark reality for the 1.3 billion people around the world living without electricity.

In a recent opinion piece in The Wall Street Journal, Matt Ridley expands on the global problem of energy poverty—and how fossil fuels can begin to solve it. The following excerpt illustrates energy’s ability to improve our lives:

The more energy you have, the more intricate, powerful and complex you can make a system. Just as human bodies need energy to be ordered and functional, so do societies. In that sense, fossil fuels were a unique advance because they allowed human beings to create extraordinary patterns of order and complexity—machines and buildings—with which to improve their lives.

The result of this great boost in energy is what the economic historian and philosopher Deirdre McCloskey calls the Great Enrichment. In the case of the U.S., there has been a roughly 9,000% increase in the value of goods and services available to the average American since 1800, almost all of which are made with, made of, powered by or propelled by fossil fuels.

Still, more than a billion people on the planet have yet to get access to electricity and to experience the leap in living standards that abundant energy brings. This is not just an inconvenience for them: Indoor air pollution from wood fires kills four million people a year. The next time that somebody at a rally against fossil fuels lectures you about her concern for the fate of her grandchildren, show her a picture of an African child dying today from inhaling the dense muck of a smoky fire.

Fossil fuels met 87% of the world’s energy needs in 2013, and are projected to meet 81% in 2035. That’s because natural gas, oil, and coal are affordable, abundant, and reliable. By contrast, renewable sources like wind and solar – which environmentalists prefer – represent just a fraction of our energy use because they are expensive, scarce, and unreliable. In other words, if we want to solve energy poverty, we need fossil fuels. As Ridley concludes:

The one thing that will not work is the one thing that the environmental movement insists upon: subsidizing wealthy crony capitalists to build low-density, low-output, capital-intensive, land-hungry renewable energy schemes, while telling the poor to give up the dream of getting richer through fossil fuels.

You can read the rest of Ridley’s piece here.