A GOOD DEAL FOR WHO? Iowa politicians support the Renewable Fuel Standard, since it helps both the state’s ethanol industry and corn growers. But a new report from the CBO predicts prices at the pump will jump if no changes are made to the RFS.
Gas prices will climb, and you can blame corn
By Watchdog.org - Paul Brennan | Iowa Watchdog——Bio and Archives--July 9, 2014
JOHNSTON, Iowa — Most of what Tim Maher knew about the renewable fuel standard came from TV commercials.
“They all talk about how it’s good for the environment and good for the country because we won’t have to import so much oil from the Middle East,” Maher said as he was filling up his car with super-unleaded at a Casey’s General Store in Johnston.
“But they sure never said anything about it making the price of gas go up,” Maher added.
That’s what will happen if no changes are made to the RFS, according to a new report from the Congressional Budget Office.
The RFS mandates the amount of plant-based ethanol that gasoline refiners must purchase to mix into the nation’s gas supply. Because the mandated amount automatically increases each year, the CBO projects the RFS will begin to drive up prices, because refiners will have to buy more ethanol than they can sell.
The report predicts prices for blends that are 10 percent ethanol, like Casey’s super-unleaded, will go up by 13 to 26 cents per gallon by 2017 because of the RFS.
Petroleum-based diesel is predicted to jump by 30 to 51 cents per gallon.
Only drivers of flex-fuel vehicles who fill up with the blend containing the highest amount of ethanol will see prices drop. The CBO predicts the price of E-85 will decrease by 91 cents per gallon by 2017.
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