Big Oil’s mouthpiece distorts the facts

Source: By Geoff Cooper, RFA, The Hill • Posted: Monday, June 29, 2015

Sofie E. Miller may have left the Charles Koch Institute in 2012, but she clearly continues to do the bidding of her former employer and the rest of the oil industry (“RFS hurts the economy,” June 11). Indeed, her claims about the economic and environmental impacts of ethanol and the Renewable Fuel Standard (RFS) come straight out of the Big Oil playbook.

Contrary to Miller’s assertion that the Environmental Protection Agency (EPA) is unilaterally proposing to increase renewable fuel blending requirements, the Agency’s proposal actually makes substantial cuts to statutory biofuel blending obligations for 2014, 2015 and 2016. The Agency’s proposal for biofuel requirements in 2016 alone is nearly 5 billion gallons—or 22 percent—lower than the volume mandated by Congress. While finalization of EPA’s proposal would be a boon to oil producers and refiners (who would happily fill the void with more crude oil from fracking, deep-water wells, and tar sands), it would be a travesty for American consumers, farmers, biofuel producers and the environment.

In regard to climate impacts, the Department of Energy’s (DOE) latest analysis shows that the production and use of grain ethanol emits 34 percent less greenhouse gas (GHG) emissions than extracting, refining, and consuming gasoline from conventional crude oil. Importantly, this estimate includes the theoretical and unverifiable “land use change” emissions cited by Miller. Meanwhile DOE shows ethanol made from crop residues and perennial grasses reduces GHG emissions by 88-108 percent compared to gasoline. These results are corroborated by separate analyses from Purdue University, the University of Illinois, California EPA, the European Commission, and a number of other public and private entities.

Miller’s claims about ethanol’s impact on food prices also fail to withstand scrutiny. According to the Department of Labor, food prices have advanced more slowly since passage of the RFS than in the 25 years leading up to the program’s adoption. And American families today spend a smaller share of their household income on groceries than at any time in history. Moreover, corn is not “diverted” away from livestock feed to make ethanol; grain supplies have risen dramatically in recent decades and are sufficient to meet all demands. In fact, due to burdensome supply levels, corn prices today are at a nine-year low. In any case, ethanol production uses only the starch in the corn (about two-thirds of the kernel), while the remaining protein, fat, and fiber is sent back to the livestock market as a highly valued, concentrated feed product.

Finally, Miller fails to recognize that ethanol reduces consumer gas prices. Today, ethanol is 60 cents cheaper than gasoline at wholesale fuel terminals, and such discounts have been the norm for the past five years. In addition, ethanol is by far the cheapest and cleanest source of octane available to refiners who must upgrade gasoline’s octane before sale into commerce. What’s more, both EPA and the White House have recently acknowledged that the RFS credit trading system has no impact on consumer fuel prices.

In the end, Miller is correct about one thing: EPA’s recent proposed rule on the RFS does indeed hurt the economy. But not for the host of phony reasons she cites; rather, the proposal is damaging because it cuts requirements for cleaner, lower-cost biofuel, and opens the door to greater volumes of dirtier crude oil sources.

Geoff Cooper is senior vice president of the Renewable Fuels Association.