By Tim Rudnicki, Esq
The dust is still settling following the recent mid-term elections and the U.S. EPA’s action to delay making a decision about the 2014 Renewable Volume Obligations (RVO). Even though we can’t see clearly through the dust quite yet, some fundamentals and challenges remain the same. At least for now.
With respect to some of those fundamentals, the Renewable Fuel Standard (RFS) and the Minnesota Petroleum Replacement Statute (PRS) are still intact. These two laws provide the backbone for moving us as a State and Nation away from being beholden to carbon intensive finite fossil fuels and toward a society grounded more fully in the use of greater amounts of renewable energy.
But what should we make of the U.S. EPA’s announcement that it will delay finalizing the RVO until 2015? As the dust settles on this issue, it is becoming clear that to delay making a decision is to not make a decision.
There is no excuse for the EPA to delay a decision. The black letter law of the RFS is clear as is the Congressional intent behind the law: push beyond petroleum’s comfort zone! For years the petroleum industry has been comfortable with using enough ethanol to boost the octane in gasoline. But the intent of the RFS is to lessen our dependence on finite fossil fuels. And the only way for that to happen is for the EPA to stand firm on the biofuel requirements set forth in the RFS. For too many years the petroleum industry has been using Renewable Identification Numbers to buy its compliance with the RFS rather than actually working to make more biofuels available to consumers.
As explored in my last column, the history of biofuels has been a roller coaster ride over the last century because various public policies, whether overt or through hidden subsidies, have favored carbon intensive fossil fuels. It is the RFS and PRS, however, that are helping to smooth out the roller coaster ride for ethanol and other biofuels. That’s important for all of us as we try to free ourselves from the fossil fuel shackles and more fully enjoy the benefits of homegrown ethanol and other biofuels. The benefits of biofuels are in the form of greater energy independence, economic growth, consumer savings and environmental quality.
With respect to the elections, just as there has been a shift in the control of the U.S. Senate, so too, has there been a shift in control of the Minnesota House of Representatives. The Minnesota Bio-Fuels Association will continue to work with all Members of the Minnesota Congressional Delegation, the Minnesota Legislature and the Governor to remind everyone that biofuels are a bipartisan solution to the economic, energy and environmental challenges that confront us.
“The economic activity started by the renewable fuel sector creates a ripple effect as supplier firms and employees respond throughout the economy.” John Dunham & Associates, Inc. (2014). In practical terms, biofuel producers located in rural communities are a positive catalyst for economic growth in those communities as well as across Minnesota. For instance, in the Twin Cities metropolitan area there are over 14,000 industry-related jobs which contribute approximately $3 billion annually to the economic well-being of the area.
Thanks in large measure to the RFS and PRS, renewable fuels also provide a strong overall economic boost to the economy, and there can be room for further growth of the biofuels industry if the RFS and PRS are allowed to function and consumers are allowed to have more choice at the fuel dispenser. Based on the Dunham & Associates Report from 2014, Minnesota’s renewable fuel industry generates approximately $11.7 billion of total annual economic output, supports over 48,500 jobs, generates $3 billion in wages annually and contributes $708.2 million in Federal taxes and $401.9 million in Minnesota taxes each year.
Economic, consumer and energy security benefits stemming from ethanol and other biofuels are also accompanied by some powerful environmental benefits. According to the Minnesota Environmental Quality Board, for example, biofuels are an important tool for reducing carbon emissions. By replacing carbon intensive petroleum with low carbon biofuels such as ethanol, Minnesota is projected to reduce carbon emissions by 874,000 metric tons which is equivalent to removing at least 188,000 cars off the road each year. That decrease in carbon emissions will grow as more biofuels are used. Biofuels help to reduce GHG emissions because green plants act as solar collectors which also use carbon dioxide to make and store energy. The energy stored in the plant is unlocked by biofuel producers to form ethanol and other biofuels. Further, including all the energy used to grow the crops to the point where the ethanol is used as fuel in an engine, the total lifecycle carbon emissions for ethanol are up to 57 percent less compared to petroleum, according to a 2012 study by the Argonne National Laboratory.
Given all the potential the biofuels industry has to provide consumers with more low cost, low carbon renewable fuel; grow the economy; and increase energy independence, now is the time to stay the course and allow the RFS to work as it was intended. Is it expecting too much for the U.S. EPA to enforce the law?