Agricultural News
CBO Report on RFS Not Rooted in Reality
Fri, 27 Jun 2014 09:45:16 CDT
Brooke Coleman, executive director of the Advanced Ethanol Council (AEC), released a statement today in response to a new report from the Congressional Budget Office (CBO) on the impacts of the federal Renewable Fuel Standard (RFS). While the report acknowledges that the RFS is not a factor in food prices, it fails to take into account basic realities when it comes to assessing the program.
"Some reports are simply not worth reading, and this is one of them. You cannot assess the impacts of the RFS without looking at the benefits of reducing consumer demand for gasoline and diesel fuel. That's the entire point of the RFS and the CBO simply states that 'it did not account for that effect in this analysis.' To put that omission in perspective, an oil economist recently concluded that the RFS saved motorists at least hundreds of billions of dollars in 2013 by adding the equivalent of an additional OPEC country to U.S. gasoline supplies during times of extreme tightness between supply and demand. Whatever the savings are, an analysis of a foreign oil displacement program that does not look at the benefits of displacing foreign oil demand should be dismissed out of hand. The gas price claims are really strange as well. A cornerstone assumption in the report has RFS-RIN prices so high that gasoline retailers could give renewable fuel blends away for free and still make a profit. Needless to say, this is never going to happen. CBO reports are supposed to be impartial and objective, and therefore informative. This particular report appears to detail a fantasy world that does not inform the current debate."
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