Just last week, the Obama Administration lowered the volume of ethanol that the fuel industry must blend into the U.S. gasoline supply, marking a notable shift in the Administration’s biofuel policy. Predictably, the renewable fuels lobby criticized the rule for hurting farmers, consumers, and increasing our dependence on costly imported oil. The Administration made the right call, however, acknowledging the reality of how rapidly the U.S. energy outlook has changed since the renewable fuels mandate was put in place.
The Great Debate
– John Kemp is a Reuters columnist. The opinions expressed are his own –
Despite a promising start, the U.S. experiment with renewable fuels is facing a serious challenge next year. Falling gasoline consumption, lower pump prices and contradictions within the federal government program are intensifying existing pressures on ethanol distillers and farmers already struggling to cope with over-capacity and collapsing margins.