Thursday morning, Department of Agriculture Secretary Tom Vilsack held a press conference at the National Press Club in Washington, D.C. His message was clear: the future of America’s energy independence and the renewable energy market rests on farmers.
“With the disastrous oil spill in the Gulf of Mexico, we are also reminded that the development of our own oil resources is not without environmental and economic risk,” said Vilsack.
“We can do better. We have to do better. Rural America is where we will do better.”
And that, according to Vilsack, is how the U.S. will meet the Renewable Fuel Standard, known as RSF2 – a mandate that calls for decreasing the country’s dependence on carbon-intensive fuels. The standard plans for 36 billion gallons of biofuels to include 21 billion gallons of advanced biofuels by 2022.
In other words, the gasoline that fuels America’s beloved cars will need to be a lot cleaner by 2022. A lot cleaner. And farmers will be the ones making it possible.
Meeting that standard, said Vilsack, is how the U.S. will begin to reduce its dependence on foreign oil and reduce greenhouse gas emissions from vehicles.
In February 2010, President Obama laid out his plan to create a clean-energy economy. It included the Environmental Protection Agency finally implementing the renewable fuel standards written into the energy bill passed by Congress and signed by President Bush in December of 2007.
Since Obama announced his vision of this ideal clean-energy economy, however, the bureaucrats within the multiple federal agencies tasked with implementing the standards, were faced with how to actually get the job done.
Their solution, announced by Vilsack in his speech, is to reinstate the Biodiesel Production Tax Credit (part of the 2008 Biomass Crop Assistance Program), and work with the Federal Aviation Administration to develop fuels from farm waste. Vilsack went a step further, by directing his agency to come up with a plan in 60 days to finance five refineries throughout the country that will convert the biomass that comes from farms, into fuel.
In theory, most agree that innovation and research in the world of biofuels is a good idea – even if it is government-funded through subsidies. American drivers use about 138 billion gallons of gasoline a year – almost all of which produce carbon emissions and other greenhouse gases.
But critics say that government tampering with the country’s fuel does more harm than good.
For one, Myron Ebell, Director of the Competitive Enterprise Institute’s Center for Energy and Environment, says the unintended consequences of fuel standards will hurt rather the help, the country’s fledgling economy.
According to Ebell, who called the plan a “boondoggle,” the tax credits are just another example of the government “paying off special interests.” Not only that, but such subsidies also raise the cost of gasoline and food for everyone – including rural farmers.
“The whole thing is just a way to pay off America’s corn farmers in the Midwest,” said Ebell. “But if ethanol is such a good fuel, we shouldn’t have to mandate it.”
Tom Borelli of the Free Enterprise Project agreed, saying, “Obama’s support of renewable energy is being driven by political considerations and bowing to big business special interests.”
“This is just more of the same,” added Ebell.
Ebell added that it is unclear whether low fuel standards will even reduce greenhouse gas emissions at all. He isn’t alone in his skepticism. A 2009 study in the American Economics Journal found that the low-carbon fuels standards like the one Obama announced earlier this year will have little impact on greenhouse gases.
According to the study’s authors, while policies like Obama’s may reduce the consumption of high-carbon fuels, production of low-carbon fuels, or biofuels, will increase. And that production could potentially increase the net emission of carbon.
Put another way: Any savings brought about by low-carbon fuels standards will be offset by the production of biofuels.
Ebell said the policy will likely not increase the import of foreign oil – one of the administration’s set goals. Rather, it would increase importation because, well, the country is still dependent on oil.
That means Americans will get it somewhere. And according to Ebell, the harder it gets for oil companies to make the fuel that runs the vehicles built by Ford, General Motors, Toyota, etc., the more the U.S. will buy oil from countries such as Iran and Saudi Arabia.
“There isn’t enough biofuel to replace the amount of fuel we’re losing,” said Ebell.
“Obama is executing a command and control energy policy that is interfering with the free market,” said Borelli. He went on to say that the fuel standards – like the renewable energy standards that were considered in the Senate just last month – will raise the cost of utility bills and drive manufacturing jobs overseas.”
“I do not under estimate the challenges, but I have seen Rural America rise again and again to continually meet the large challenge of providing food, feed, and fiber for the country and the world,” said Vilsack in his closing statement.
“I believe the president’s vision for rural America compels us to action. I believe the goals articulated within the RFS2 mandate action. And, I believe the need for energy security, a cleaner environment, and better economic opportunity in rural American make the case for immediate action.”
If the skeptics are right, Obama’s low-carbon fuel standards, championed by Vilsack in his speech, will do exactly none of those.