Renewable Fuel Groups Experience Deja vu Over API StudyWed, 09 Sep 2015 16:08:09 CDT
Renewable energy groups are up in arms over a study of the economic impacts of the nation's Renewable Fuel Standard (RFS). The Renewable Fuels Association and Growth Energy both responded to the results of a study released by the American Petroleum Institute (API) that was commissioned by NERA Economic Consulting (NERA). Click here to read the API study, titled: Economic Impacts Resulting from Implementation of the RFS2 Program.
Tom Buis, CEO of Growth Energy stated, “While API and its allies attempt to keep America hooked on dirty and dangerous foreign oil, consumers are paying the price. Americans deserve market access to renewable fuel, and a cleaner, less expensive choice at the pump. Ethanol blends like E15 reduce greenhouse gas emissions and make the air we breathe cleaner. And despite what API claims, over 84 percent of cars on the road today are approved to use E15. Regardless of what API claims, the bottom line is that ethanol blends help clean the environment, are higher performing, less expensive and directly benefit the consumer by providing a choice and savings.”
“Even as API and other special interests aim to protect their stranglehold over 90 percent of our fuel market, Americans realize that ethanol-blended gasoline is a cleaner, less expensive motor fuel that’s increasing our energy independence and security,” said Buis. “It’s time to put an end to the oil industry’s lies. A strong RFS is good for drivers, America’s economy, and our future.”
Renewable Fuels Association President and CEO Bob Dinneen stated, "It’s déjà vu all over again. "This study is virtually identical to a study that NERA published for API in 2012. The conclusions of both analyses are completely divorced from reality. The 2012 study claimed the fuel market would be pushed into a death spiral by the RFS, and that the program would cause 2015 GDP to fall by a whopping $770 billion. The 2012 study also ridiculously suggested that, in response to implementation of the RFS, diesel fuel supplies would fall by 15 percent, resulting in a 300 percent increase in diesel fuel prices and a 30 percent increase in gasoline prices. API was wrong in 2012, and it’s wrong in 2015.
“This newest API study contains many of the same fatal flaws that plagued the 2012 study. This study claims that gas prices will rise by $90 a gallon and diesel will rise by $100 per gallon. It foolishly assumes EPA will not ever utilize its cellulosic waiver authority to partially reduce the advanced and total RFS volume requirements. And it also assumes obligated parties would purchase a RIN credit at any price rather than making modest infrastructure investments to expand renewable fuel distribution.
“In the end, the new API study has no basis in reality and suffers from the same methodological maladies that prompted Iowa State Professor Bruce Babcock to write in response to the 2012 study that ‘the NERA compliance strategy is not feasible unless obligated parties formed an illegal cartel to reduce sales to boost prices.’”
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