Running Drivers’ Into the Blend Wall

A bipartisan group of 39 Senators is trying to make it more expensive to fill up your car—effectively making you pay more for everything you buy. Led by Sen. Chuck Grassley (R-Iowa) and Amy Klobuchar (D-Minn.), they wrote to Environmental Protection Agency Administrator Gina McCarthy on June 24, urging her agency to get the Renewable Fuel Standard (RFS) “back on track”—code for compelling refiners to comply with the program’s increasingly unattainable statutory goals. In November 2013, the EPA for the first time proposed to reduce the total annual RFS mandate below the statutory target.6 Moreover, the EPA for the first time decreased the target based on the “blend wall”—a set of market conditions limiting the quantity of ethanol that can actually be sold to about 10 percent of the nation’s gasoline supply.7 One important constraint is that the overall size of the gasoline market is now projected to be 19 billion gallons smaller in 2017, and 40 billion gallons smaller in 2022. Congress should repeal the RFS so that consumer preference and competition, rather than central planning policies, determine which fuels succeed or fail in the U.S. marketplace.

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