NTU Testimony at Renewable Fuel Standard Hearing in Front of the EPA

To:       Environmental Protection Agency

            1200 Pennsylvania Ave, NW

            Washington, DC 20004

From:   Nan Swift

           Federal Affairs Manager

           National Taxpayers Union

           25 Massachusetts Avenue, NW Suite 140

           Washington, DC 20001

Re: Docket ID: EPA-HQ-OAR-2017-0091

Thank you for holding this field hearing and permitting interested parties, such as the taxpayers represented by myself and National Taxpayers Union (NTU), to participate in a dialogue on the recently issued Renewable Volume Obligations (RVO) for 2018 and Biomass-Based Diesel Volumes for 2019.

Founded in 1969, NTU is the nation’s oldest taxpayer-advocacy organization with a long track record of defending family budgets from Washington’s overreach. Taxpayers can easily see the amount of income taxes they owe to the government when April 15th rolls around. Similarly, they understand how much they pay in sales taxes when they see it listed at the bottom of a receipt. The same cannot be said for policies like the Renewable Fuel Standard (RFS), the underlying statute for today’s field hearing on the latest RVO proposal.

The RFS, and its ethanol mandate requirement, is in essence a hidden tax on families and consumers - an added expense on top of essentials such as fuel and food for budgets already stretched thin by stagnant wages, rising health care costs, and an uneven economic recovery.

These added costs are everywhere.

At the gas pump, consumers must fill up more often because a gallon of ethanol contains roughly two-thirds the energy of a gallon of gasoline. Plus, in order to artificially boost the sale of higher ethanol blends, despite the fact that there is little consumer demand, and a majority of the U.S. fleet cannot safely use ethanol blends greater than E10, the U.S. Department of Agriculture - over the will of Congress - has spent at least $100 million in taxpayer funds to encourage the installation of E15 blender pumps at gas stations. Misfueling and the corrosive nature of ethanol blended fuels also impose a cost in the form of engine damage to cars, boats, motorcycles, and other outdoor products. At times, this can even create scenarios that pose health and safety risks.

At the family table, the ongoing diversion of corn from the food chain to the fuel tank imposes its own cost. Limited flexibility in the supply chain for livestock producers creates market instability and exacerbates the impact of droughts and other unanticipated events. The guaranteed market for corn created by the RFS incentivizes farms to grow more corn at the expense of other commodities and produce.

This doesn’t just hurt the family budget, this also hurts the environment as marginal land that would otherwise be unprofitable is tilled under and crop rotation is dispensed with, depleting the soil and requiring greater levels of nitrogen and phosphorus-heavy fertilizers to remain productive. Taxpayers have funded billions at both the federal and state level to address the ensuing water-quality issues, such as harmful algae blooms.

For these reasons, we were pleased to see that the Environmental Protection Agency (EPA) acknowledged “real constraints” in the market, in terms of demand, infrastructure, and production, toward accommodating higher blends of ethanol. If admitting you have a problem is the first step toward recovery, this and the slightly lower RVOs recommended in the 2018 proposal are good signs for taxpayers. However, in order to create a freer market that affords more consumer choice for fuel blends that best suit their needs, including E0, we respectfully urge the EPA to further waive the RVO for 2018 and to work with Congress to remedy this broken policy once and for all.


Nan Swift

Federal Affairs Manager

National Taxpayers Union