June 5

June 5, 2019: New GAO report confirms RFS fails to reduce emissions, increased gas prices

In a new report made public June 3rd, the Government Accountability Office (GAO) provided further evidence of what we’ve already known for some time: that the RFS has failed to reduce greenhouse gas emissions and that, at least for a time, it actually increased gas prices in many regions in the U.S.

In fact, just about the only sin that the GAO does NOT seem to have associated with the RFS is the much trumpeted “Demand Destruction” fallacy … possibly because EIA data proves it is not occurring!

Here are some of the key findings from the GAO:

  • “Most of the experts we interviewed generally agreed that to date the RFS has likely had a limited effect, if any, on greenhouse gas emissions. Further, the RFS is unlikely to meet the greenhouse gas emissions reduction goals envisioned for the program through 2022.”
  • “In addition, according to EPA officials, the vast majority of the corn-starch ethanol used to date has been produced by so-called grandfathered plants—plants in operation or under construction before a certain date—that have been exempt from RFS emissions reductions requirements.”
  • “Evidence from studies, interviews with experts, and our analysis suggest that the nationwide RFS was likely associated with modest price increases outside of the Midwest.”
  • “Other regions began blending ethanol later as rising volumes of ethanol required under the RFS forced more ethanol into the system and as states began blending ethanol. These states incurred new transportation and storage infrastructure costs, which likely resulted in higher gasoline prices compared to those in the Midwest states or states that had not yet begun to blend ethanol.”

Finally, as of this writing, Minnesota E15 and E85 sales (where the data is by far the most comprehensive) are still surging, and the February blend-rate was the highest it has been in the last year.  All of which begs the question: why do our biofuels friends like to complain so much?