Dear Senator Barrasso and Representative Goodlatte:
On behalf of more than two million Americans for Prosperity activists in all 50 states, I applaud you for introducing legislation that would repeal the federal Renewable Fuel Standard (RFS) (S. 1195, H.R. 1461). This would eliminate the government mandate that refiners blend a certain amount of biofuel in gasoline, and it would have a positive impact on household budgets.
Coupled with other tax preferences for renewable fuel, the RFS leads to higher prices at the grocery store and the gas pump. This is a de-facto tax on American families, falling particularly hard on low-income people who spend a greater percentage of their income on food and fuel.
The RFS distorts agricultural markets considerably. This mandate encourages farmers to shift corn production away from food and feedstock, as well as to scale back their production of other commodities such as soybeans and wheat. The ultimate result is more expensive groceries—recent research from Purdue University shows that repealing the RFS would cause overall food prices to fall approximately 13 percent.
Increasingly, the RFS fails to match up with current economic realities. Beginning in 2014, for instance the RFS effectively requires gasoline refiners to blend volumes of advanced biofuels (e.g., cellulosic ethanol) that are not currently commercially available—the so-called “blend wall.” This forces refiners to choose between purchasing expensive RIN credits and paying a fine for failing to purchase a product that does not exist in the marketplace.
Energy technologies should compete in the open marketplace on their merits, without the protection of government mandates. No longer should government officials attempt to replace market forces with their own preferences at the expense of American consumers. Americans for Prosperity is proud to support S. 1195 and H.R.1460, your legislation to repeal the RFS. I urge your colleagues to support its passage, and I look forward to working with you in the future.
Christine Harbin Hanson
Federal Affairs Manager
Americans for Prosperity