Business

Federal Policies Increased US Biofuel Imports 761 Percent In Just One Year

Daily Caller News Foundation logo
Michael Bastasch DCNF Managing Editor
Font Size:

A policy intended to promote American energy independence has failed, as the U.S. has gone from being a net exporter of biodiesel and renewable diesel to being a net importer of the fuels.

The Energy Information Administration (EIA) reports that imports of two biomass-based diesel fuels –biodiesel and renewable diesel — increased 761 percent in just one year primarily due to the Renewable Fuel Standard (RFS), which requires blending ever increasing amounts of biofuels into the U.S. fuel supply.

“Last year, total U.S. imports of these two varieties of biomass-based diesel fuel reached 525 million gallons, compared to 61 million gallons in 2012,” EIA reports, adding that federal policies and access to growing biofuel production abroad have driven the huge increase in imports.

“As a result, the United States switched from being a net exporter of biomass-based diesel in 2012 to a net importer in 2013 by a wide margin,” EIA adds.

The main driver of the growth in biomass-based diesel demand has been the RFS, which increased the amount of biofuels to be blended into the fuel supply from 15.20 billion gallons in 2012 to 16.55 billion gallons in 2013.

The RFS increased biomass-based diesel blending target from 1 billion gallons in 2012 to 1.28 billion gallons in 2013. Advanced biofuel blending requirements rose from 2 billion gallons to 2.75 billion gallons over that same time period. Biodiesel and renewable diesel qualify for both of these categories.

Government-driven demand, combined with the help of a $1 per gallon biodiesel tax credit, have boosted U.S. production 35 percent from 2012 to 2013. But domestic production was not enough to meet federal mandates, thus increased imports were required. EIA also notes that because the biodiesel tax credit wasn’t extended through 2014, imported biodiesel could play a bigger role this year in meeting federal blending targets.

The RFS was originally passed in 2005, but was expanded in 2007 to include a biodiesel mandate. The idea received bipartisan support, but is now under fire for not delivering on the promised benefits.

“This is just another reason why Washington should get the hell out…and stay the hell out…of anything having to do with energy,” Dan Kish, vice president of policy at the free-market Institute for Energy Research, told the Daily Caller News Foundation.

“Everything they touch turns to excrement,” Kish said.

The RFS requires 36 billion gallons of renewable fuels to be blended into the U.S. fuel supply by 2022. But last year the RFS came under fire from refiners who say that they were reaching the limits of what could be safely blended into the fuel supply — the so-called “blend wall”.

Increasing federal fuel economy standards, the RFS and a lagging economy decreased gasoline demand in the U.S., meaning refiners began producing less of it. But the RFS required more and more biofuels to be blended into the fuel supply, meaning refiners faced rising renewable fuel credit prices and safety concerns from blending ethanol at higher than a 10 percent ratio.

“[The Environmental Protection Agency] shouldn’t try to micromanage ethanol mandates based on slight changes in gasoline demand forecasts,” said Bob Greco, downstream director at the American Petroleum Institute.

“These mandates set the minimum amount of ethanol that must be used each year—not the maximum,” Greco said. “So it’s better to err on the side of caution with the final rule rather than force more ethanol into gasoline than is safe.”

The EPA eventually caved to pressure from refiners, environmentalists, the livestock industry and others who were concerned about the environmental and economic impacts of increased biofuel production around the world.

Anti-hunger groups argue that biofuels production raises food prices as more crops are diverted towards fuel production and away from feeding people, hurting the poor the most. This effect was most pronounced by the increased diverting of corn crops to ethanol production.

“Ethanol from corn also is concerning to many due to its global warming impact and the use of natural resources such as water and native grassland for producing fuel,” environmental and anti-hunger groups wrote to Congress last year. “The corn-based ethanol mandate is also having a devastating impact in communities throughout the world, where people living in poverty are facing increased food prices that threaten their food and land security.”

Biodiesel is made from combining vegetable oils or animals fats and alcohol to get fatty acid methyl esters. It’s generally blended into petroleum diesel at volumes of 5 percent or 20 percent.

Renewable diesel is produced from vegetable oils and animals fast using a hydrotreating process. EIA says it meets the same American Society for Testing and Materials standards as petroleum diesel and isn’t subject to blending limits put on biodiesel.

Both of these biomass-based diesels have a higher energy content that ethanol and generate more renewable fuel credits — which refiners can purchase to meet federal blending rules. They each also qualify for California’s Low Carbon Fuel Standard (LCFS) because of their lower carbon dioxide intensity.

U.S. biomass diesel imports came primarily from Argentina, says EIA, partly due to European trade laws that made it costlier for Europeans to buy Argentine biofuels last year which drove more of product to the U.S.

“Just over 77% of total U.S. renewable diesel imports came from Singapore and entered the United States on the West Coast (PADD 5), likely for California LCFS compliance,” EIA says.

Follow Michael on Twitter and Facebook

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel