Drought? What Drought? EPA Refuses To Waive Ethanol Mandate


The Federal Renewable Fuels Standard and the drought over the summer sent the price of corn through the roof. Several states and meat industry groups requested that the mandate be lifted, and after some hemming and hawing the EPA finally made a decision. As expected they’re refusing to lift the mandate.

EPA rejected petitions from nearly a dozen states, including Texas, Virginia, and Maryland, for waivers of the federal Renewable Fuel Standard (RFS).

“[T]he agency has not found evidence to support a finding of severe ‘economic harm’ that would warrant granting a waiver of the Renewable Fuels Standard,” EPA said Friday.

Opponents of the RFS say drought-driven spikes in corn prices and reduced harvests should prompt the agency to relax the requirements, which require refiners to blend billions of gallons of ethanol into gasoline.

Livestock, poultry and food industry groups dismayed at the amount of corn used for ethanol have joined states in calling for EPA to back off the ethanol mandate. EPA also faced congressional pressure to ease the requirements.

But EPA tossed aside their arguments. (Read More)

It’s routine for the EPA to toss aside arguments of anyone pointing out how its mandates hurt business and the economy. And this ethanol policy does both.

The single most regressive market-distorting policy to ever emanate from Washington is the absurd tendentious treatment of ethanol.  Over the past decade, ethanol has been the poster child for the worst aspects of big-government crony capitalism.  The ethanol industry has used the fist of government to mandate that fuel blenders use their product, to subsidize their production with refundable tax credits, and to impose tariffs on more efficient sugar-based ethanol from Brazil.  These policies have distorted the market for corn to such a degree that 44% of all corn grown in the country is diverted towards motor fuel blends.  If we would literally flush half the corn harvest down the toilet, we would be better off than using it to make our motor fuel less efficient.

Now, consumers are stuck with higher food and fuel prices, while rich farmers enjoy the favors of free legislation forcing people to buy their odious product.  Although the subsidy has expired, the Renewable Fuels Standard (RFS), which requires that 10% of all fuel be mixed with ethanol, is still in effect.  There is no worse tyranny than using the power of the law to coerce citizens into purchasing an ineffectual product that costs more, and in turn, drives up the cost of everything else along the food chain.

Read the whole thing, as it goes on the explain how this is a prime example of the “regressiveness of progressives,” and how this mandate forces all of us to pay for this massive boondoggle that benefits the rich. This is crony capitalism at its worst.