Environmentalists & Oil Exec's Unite on RFS Volume Reduction
A surprisingly unusual coalition of folks have united to support the EPA's reduction of RFS Volume Requirements including food industry leaders, environmental groups, humanitarian groups and oil industry groups. Why is that?
Everyone involved has concerns about different impacts they believe are created or exascerbated by the mandate, especially if the volumes hold or increase. Refiners, for example are concerned about their ability to breach the "blend wall", where every gallon of gasoline would contain the required 10% - once thats hit it will be extremely difficult for refiners to generate the neccessary RINs, largely because of concerns about moving past an E10 blend.
Refiners and Motorist groups like AAA argue that E15 is not approved for use in a large portion of vehicles, and 13 major car manufacturers will even void warranty coverage in vehicles running E15. That's a huge issue for folks with cars that are not model 2014. Even the Ethanol groups numbers on this issue leave approximately 250 million vehicles on the road that cannot run properly on E15 - that's not good news for Joe Six Pack.
So why are Environmental groups throwing their support behind a Volume Reduction? Isnt Ethanol supposed to be "green"? Well, maybe not. Original numbers put ethanol at 16% greener than gasoline, and then theres the more obvious environmental impacts. An estimated 5 million acres of land that had previously been set aside for conservation have been converted into farm land for corn for ethanol. Fertilizer run offs have worsened a "dead zone" in the Gulf of Mexico, and contaminated some local water supplies as well, according to an AP investigation.
Food producers oppose the mandate on the basis that diversion of corn for use in fuel versus the food supply has driven up the cost of animal feed, as well as corn used in processing itself.
Beyond just supporting the Volume Reductions, the groups in question support a full repeal of the RFS in many cases.
I wrote an article for Oil & Energy Magazine that gets a little more detailed on the RFS Reduction, you can read it here if you are interested: Oil & Energy Magazine
What are your thoughts on the RFS Mandate and potential Volume Reductions?
