At a Mar. 7 gathering in Des Moines of Republicans flirting with presidential candidacy, Iowa Gov. Terry Branstad opened with a warning: "Don't mess with the RFS."
This is sound political advice. Because its precinct caucuses start the chain of events leading to candidate selection, Iowa has disproportionate importance in presidential politics. And Iowans overwhelmingly like the Renewable Fuel Standard and dislike politicians who oppose it. The would-be candidates, moreover, were attending the inaugural Iowa Ag Summit created by Bruce Rastetter, a generous party donor who made a fortune from corn ethanol.
Yielding to pressure
Most of the luminaries yielded to the pressure. Sen. Lindsey Graham of South Carolina, New Jersey Gov. Chris Christie, and former Arkansas Gov. Mike Huckabee praised the RFS-and, by association, governmental enlargement of the market for corn. Former Florida Gov. Jeb Bush and Wisconsin Gov. Scott Walker found ways to not exactly support the program but to not exactly oppose it either. Only Sen. Ted Cruz of Texas and former Texas Gov. Rick Perry clearly opposed it. Cruz and Perry thus escape a question the others, including the host governor, should have to answer: What do you have against responsible governance?
As a program, the RFS is a wreck. Its underlying law assumes growth in gasoline demand that hasn't materialized and supply of cellulosic ethanol that hasn't developed. Its implementing regulator, the Environmental Protection Agency, is perennially tardy with volumetric mandates and only lately reluctant to make refiners and importers blend more cellulosic ethanol than exists. Regulated entities in effect have to buy their way out of noncompliance with the program's embedded delusions.
It would be no contradiction, therefore, to favor any or all of the renewable fuels, to support sales mandates and subsidies that support them, yet to detest the RFS for demonstrating how thoroughly and unjustly a governmental program can go wrong. For renewable-fuel fans, in fact, this is the only reasonable stance. Support for any measure as demonstrably flawed in concept and execution as the RFS has proven to be, whether it's about biofuel or baby food, is indefensible.
The RFS should be fixed or junked. Whether repair is even feasible is a legitimate question for political discussion. So, more fundamentally, is the propriety of governmental mandates for sales of select fuels. But no one reasonably can express support the RFS without also calling attention to the need for changes that might make compliance possible. About that, Republicans paying homage to the RFS in Des Moines had nothing to say.
Their silence probably reflects political calculation, too. Fixing the RFS the ethanol lobby's way would alienate other constituencies. Ethanol supporters, for example, push higher blending limits to address the blendwall problem-the saturated gasoline market's inability to accommodate required new volumes of the additive. But that step compromises consumer interests. Manufacturers of small engines say ethanol at elevated concentrations damages their products. Automakers worry about engine damage from misfueling. Refiners know they'll receive blame for all problems.
Outside the Grain Belt, increased use of ethanol faces growing resistance. Many environmental groups no longer support an additive they once thought to be a clean fuel. Food manufacturers dislike how mandated growth in demand for ethanol feedstock raises prices of corn and other grains.
A better repair
A better repair of the RFS is possible-at least in theory. It would cut mandates for ethanol in general and physically scarce cellulosic ethanol in particular. This would calibrate biofuel requirements to realities of the market and mitigate some of the distortions now undermining the RFS program's legitimacy.
But, of course, the presidential wannabes expressing support for the RFS in Des Moines couldn't propose anything that might shrink officially distended markets for ethanol and corn. Ethanol profiteers would have howled. They want the RFS to be politically untouchable. They thus make clear that the best course, indeed, isn't to mess with the RFS; it's rather to scrap the whole, corrupt mistake.
