400 Capitol Street, NW
Washington, DC 20001
- Toll Free 1.888.564.6273
- Local 202.783.3870
Government goes to those who show up. FreedomWorks makes it easy to hold your elected officials accountable in our fully interactive Action Center.
Find activists, groups, and events right in your own neighborhood. Join FreedomConnector to get involved and learn more about key issues threatening our economic freedom. Whether you’re looking for like-minded people, trying to boost your existing group’s impact, or simply trying to stay up on current events, FreedomConnector is the place to start. See what’s happening in your state today!Get Connected
400 Capitol Street, NW
Washington, DC 20001
FINALLY, someone in the mainstream media covers the one aspect of the automotive fuel standards debate that almost everyone-- even most Republicans-- ignores: the inconvenient fact that smaller, lighter cars are more dangerous to drive. In a piece in August titled "People buy small cars even though they can be deadly", USA TodayÃ¢â‚¬â„¢s James Healey wrote a long story, and a produced great chart, on the danger of the lightest class of cars.
Americans are buying more small cars to cut fuel costs, and that might kill them.
As a group, occupants of small cars are more likely to die in crashes than those in bigger, heavier vehicles are, according to data from the government, the insurance industry and the National Academy of Sciences (NAS).
And its not because smaller cars are hitting heavier SUVs...light cars are twice as deadly when hitting trees, guardrails, and other light cars, and USA Today reports that 53 percent of light car fatalities are single-car or light car hitting light car accidents. You're also more likely to be in an accident in a light car-- probably because they are less visible. ItÃ¢â‚¬â„¢s a great piece with a lot of data and good talking points for the ongoing fight over CAFE standards. Now if Congress would just focus on the human cost of fuel efficiency mandates.
Top Ten Reasons to Eliminate Renewable Fuel Standards
By Scott Alford
Renewable Fuel Standards (RFS) are the ultimate example of why government is best left on the sidelines of the free market. In an effort to promote clean energy, the Environmental Protection Agency (EPA) enacted these RFS standards, requiring a certain level of ethanol to be blended into the nation’s fuel supply. The result has been myriad unintended consequences across the economy, from agriculture to the auto industry.
Despite the lackluster results, the EPA has decided to slowly intensify the standards. In early 2013, the EPA decided to increase fuel standard from E-10 (an effective blend of ten percent) to E-15 (15 percent), slowly choking an already overburdened energy market. The situation is quickly coming to a head and the repercussions will soon be highly visible at the car dealership, gas pump, and grocery store if nothing is done to repeal these standards. Here are the Top 10 of many reasons to eliminate RFS once and for all:
1. The Standards are Based on Faulty Economic Projections
According to The Congressional Research Service, the EPA, when determining the RFS, adopted the Department of Energy’s (DOE) 2007 oil consumption projections. These numbers were based on the assumption of increasing oil consumption; however the data failed to factor in recessions or variation in oil use. When new efficiency standards and the recent recession drove consumption down, the result is higher than anticipated mandated levels of ethanol in the fuel supply, jeopardizing automobile engines and fuel infrastructure.
Further, EPA policy is forcing refining companies to meet unrealistic standards for unproven fuels. For example, in year 2011, the EPA issued a $6.8 million penalty on refiners for failing to meet the 6.6 million gallon cellulosic biofuel mandate despite overwhelming testimony explaining that production of that fuel at the mandated level wasn’t plausible.
2. Renewable Fuel Standards (RFS) Damage Engines
Scientific studies demonstrate blends of ethanol create risk for automobile engine because of the corrosive properties of alcohol. Therefore, the current E-15 standards are potentially debilitating to automobile motorcycle, and boat engines.
The EPA even warns the owners of older or specialized vehicles to avoid the new E-15 fuels because of the high risk of serious injury or death. Brent Bailey, head of a bio research group, has performed 20 studies on the effects of new ethanol blends. He describes the results on older cars as looking "a little bit like Russian roulette." In other words, most cars will be fine but there is a significant danger to consumers if someone places the new fuel in order cars.
3. Violates Warranties
All of the major manufactures of vehicles have suggested consumers avoid fuels with over 10 percent because it might damage their car and void manufacturer warranties. Some car companies have placed labels on new cars warning that they are not responsible for damages caused by E-15 fuel. This also prompted AAA to issue a warning that EPA policy establishes a "strong likelihood of consumer confusion and the potential for voided warranties.”
4. Burdensome to Gas Stations
The new RFS requirement will require gas stations, 95% which are individually owned, to revamp and renovate their pump infrastructures. They will be required to have pumps known as “blender pumps” which dispense both E-10 and E-15. Often, gas stations make pennies per gallon sold and new infrastructure will harm gas station owners forcing them to raise prices or risk bankruptcy.
5. 4 Gallon Mandate
Because of the dangers thatE-15 Fuel poses to certain engines, the EPA will begin requiring at least four gallons of fuel to be purchased by all customers at stations that sell E-15 and use blender pumps. The rule is designed to prevent people from buying small quantities of E-10 which could be contaminated by residual levels of E-15 in the pump system.
This regulation is far outside the authority bestowed upon the EPA which has neither the authorization to regulate nor the means to enforce such a policy. Representatives James Sensenbrenner (R-Wis.) and Chip Cracaack (R-Minn.) summed it up well in a letter to the EPA “EPA’s first-ever fuel purchase requirement appears to have been made outside the normal rulemaking process, seems antithetical to free markets, and highlights the flaws in the Agency’s hasty decision to grant partial waivers for E15 prior to comprehensive scientific assessment and evaluation.”
6. Reduce Fuel Efficiency
The energy density of ethanol is lower than normal gasoline. US News reported that ethanol delivers 25% less mpg than regular unleaded gasoline. This means that consumers have to purchase more fuel to drive the same distances. Consumer Reports explained that ethanol not only contains less energy than gasoline; it takes a lot more energy to produce. Thus, the RFS make both the consumption and production of energy less efficient.
7. CAFÉ standard Attainment for Car Manufactures More Difficult
The White House has set new fuel economy standards through the National Highway Traffic Safety Administration (NHTSA). Corporate Average Fuel Economy (CAFE) standards dramatically increase fuel mileage requirements to 54.5 miles per gallon by 2025 for the entire fleet of cars.
However, the new renewable fuel standards would gradually reduce the gas mileage of car engines because ethanol is less energy dense than oil. Thus the two policies are working against each other while manufactures are stuck trying to comply with an unreachable CAFE standard.
8. Rent Seeking: Farmer Lobby Over the American Consumer
Looking at the math, the EPA’s policy concentrates the benefits and widely distributes the harms. Sofie Miller, a Policy Analyst at the George Washington University Regulatory Studies Center , concluded that the EPA’s policy was consistent with political rent-seeking. This rule concentrates benefits to special farm interests like the corn and the soybean industries.
For example: the rule will raise soybeans prices by 18 cents per bushel, yielding soybean farmers a $550 million increase in revenues based on 2011 bushel-production figures. The price of soybean oil is expected to rise by 3 cents per pound, adding up to a $1.2 billion increase in revenues for soybean oil producers. This is one example of how the EPA continues to promulgate political favors rather than sound policy. Rather than encouraging healthy competition, the fuel mandates encourage political rent-seeking harming consumers and taxpayers.
9. Environmental Impact
The EPA claims a major motivation behind Renewable Fuel Standards is protection of the environment. RFS prop up biofuel markets like Ethanol. However, numerous studies reveal ethanol may actually cause more net harm than normal fossil fuels. One issue with ethanol production is water usage. According to a 2007 study by the U.S. National Academy of Sciences, US ethanol consumes 200 times more water in production than normal corn crops. The new mandates encourage increased conversions of wetland into farmland.
The Swiss Federal Laboratories concluded that biofuels “often shift environmental burdens toward land-use related impacts.” The corn ethanol requirement has resulted in more loss of wetlands and grasslands in the last four years than in the previous 40. With increased farming comes more fertilizer and pesticides that pollute the soil and underground aquifers and waterways. The Organization for Economic Cooperation and Development also concluded “The overall environmental impacts of ethanol and biodiesel can very easily exceed those of petrol and mineral diesel.”
10. Dramatically Rising Food and Gas Prices
The laws of supply and demand explain the cost of the ethanol requirement. By using corn for fuel, the cost of corn has skyrocketed. First, corn was originally cheap feed for animals, but with the increase demand for corn resulting from the RFS, the supply for animal feed has increased causing prices of milk, eggs, and meat to rise dramatically.
Further, a study by NERA Economic Consulting found that the RFS will result in a 30% increase in gasoline prices and a 300% increase in the cost of diesel fuel in 2015.
Top Ten Reasons to Eliminate Renewable Fuel Standards By Scott Alford
Government environmental regulations are actively working against each other, in the latest example of the unprecedented lack of leadership in the executive branch. The Obama White House and the Environmental Protection Agency (EPA) have each imposed contradictory regulations upon the automobile and oil industries in an attempt to reduce fuel consumption yet increase renewable fuel production. Fuel economy and biofuel standards are sending mixed signals to the market about government policy priorities which frustrate the market and burden the economy with unnaturally high prices.
On one hand, the White House is setting new fuel economy standards through the National Highway Traffic Safety Administration (NHTSA). Called the Corporate Average Fuel Economy (CAFE) standards, they dramatically increase fuel mileage requirements to 54.5 miles per gallon by 2025 for the entire fleet of cars. This incredibly ambitious regulation by the Obama Administration would require car manufacturers to increase mileage per gallon by making cars lighter and by creating more efficient engines. These regulations are set to impose thousands of extra dollars upon consumers for every new vehicle. These overzealous expectations have lead many experts to speculate that automobile manufactures will struggle to meet the expectations of the Obama Administration at a reasonable cost to the consumer.
On the other hand, the EPA has decided to double down with newly imposed Renewable Fuel Standards (RFS), which reduce fuel efficiency on car engines. Earlier this year, the EPA overstepped its authority by requiring a higher ethanol standard from auto makers, from E-10 to E-15. This would gradually reduce the gas mileage of car engines because ethanol is less energy dense. By mandating higher consumption of lower density fuels such as ethanol fuel, the EPA is undermining the automobile companies who are trying to attain a nearly unreachable CAFE standard.
These policies are clearly counterproductive. The government has demonstrated that its priorities often don’t align with the consumer choices. Instead, costly regulations are often established to benefit special interests, like the renewable fuels market, rather than to establish effective goals. Government coordination of the market has resulted in major setbacks, not progress. The National Association of Convenience Stores (NACS), many convenience stores obviously being gasoline stations, explained “RFS and CAFE policies cannot coexist without substantial changes in the retail and vehicle markets to accommodate significantly higher concentrations of renewable fuels.”
In an attempt to comply with the stiff regulations, already reeling auto manufacturers could be crippled. Automakers could be penalized for failing to meet the standards. If an auto manufacture’s combined fleet fuel economy doesn’t meet the standards, they may opt to quit the business rather than pay the extensive fines for failing to meet the requirements. Fewer producers of cars will reduce competition and consumer choice. Car companies who weather the government regulations will be ‘rewarded’ with lower profits as sales slow and profit margins close in response to regulatory costs.
The retailers of fuel are the final group affected by the cost of the new regulations. The fuel industry has to invest in a completely new infrastructure to accommodate new blends of fuel. The NACS has projected it could cost the industry $22 billion in infrastructure remodeling alone. CAFE—RFS regulatory burden is a classic case of the left hand and right hand tugging on opposite ends of the same rope.
By trying to have the best of both worlds, the government will have fewer environmental benefits but at a high economic price tag. Instead of government having their hands in the regulating business, the government should institute a policy of Laissez Faire (hands off) economics which would allow the best technologies to progress in the market without the burden of the government’s counterintuitive policies.
Government environmental regulations are actively working against each other, in the latest example of the unprecedented lack of leadership in the executive branch. The Obama White House and the Environmental Protection Agency (EPA) have each imposed contradictory regulations upon the automobile and oil industries in an attempt to reduce fuel consumption yet increase renewable fuel production.
Want more freedom? Become a member today!