AFPM reiterates fallacy in US Renewable Fuel Standard

18 March 2013 05:47  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--The problem with the US Renewable Fuel Standard (RFS) is that the mandate has always been on volume and not percentage, the American Fuel & Petrochemical Manufacturers (AFPM) said on Sunday.

The RFS was created by the Energy Policy Act of 2005 to establish a US fuel volume mandate to boost ethanol, biodiesel and other renewable resources.

When the RFS was created, Americans were spending a lot of money on gasoline, and the question was where did the US stand in the oil market, AFPM president Charles Drevna said in a news conference before the group’s annual meeting.

“Fast forward a year later in 2009 when oil economy went soft, so demand has declined and now it’s been flat, but meanwhile you have this mandate to blend more and more ethanol, and we’re basically at the breaking point,” he said.

“It doesn’t matter that we’re getting to it; it matters that the market is reacting to it,” Drevna added. “I don’t believe that it was hope that it was the intent when the bill was passed to have the market value of independent refiners take a hit because of this programme that needs to be repealed.”

The AFPM considers there is a fallacy in the belief that if the US implements the RFS and begins relying less on oil, then the country will become energy self-sufficient.

“We are the engineer that drives the economy; we have to keep that engine running smoothly,” Drevna said.

“The federal government has a great track record of picking winners and loser, and they have a great track of picking the losers,” he added. “We’re not opposed to regulation. We’re just opposed to regulation that is trying to shut us down against something that can’t compete."

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By: Tracy Dang
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