Streetwise Professor

The EPA bowed to reality, and has admitted that the blend wall is real.  That is, (a) the vast bulk of autos in the US can only use gasoline with 10 percent of less ethanol, and (b) the mandated level of biofuel consumption exceeds 10 percent of US gasoline consumption.  The gap between the mandated use of biofuels and the actual use of biofuels had led refiners to scramble to by Renewable Identification Numbers (“RINs”) that they can substitute for actual biofuels to meet their mandate obligations.  But the supply of RINs is limited, and their price had skyrocketed started in the spring.  The available supply of RINs for 2014 would have been totally inadequate to cope with the increase in the mandated quantity for that year.  A quantity set by Congress in 2007 when it had no idea what market conditions would be it kicked in, and in defiance of technological realities.  Congress anticipated a steady increase in gasoline consumption, but stagnant economic growth and other factors have led to stagnant gasoline consumption, leading to the current yawning gap between the mandated quantity of biofuels and the quantity that can actually be utilized.

As a result, the EPA has decided to cut the mandated quantity for 2014 by nearly 1/6th, or 3 million gallons.

Economically this is the right result, but legally and procedurally it is a monstrosity.  Congress did give EPA the discretion to waive the mandate, but limited that discretion.  The agency can modify the mandate for two reasons.  Here’s how Reuters describes it:

This can be used to reduce the volumes in two cases: if enforcing the law were to cause economic hardship; or if it were simply not feasible due to “inadequate domestic supply”.

Making the “economic hardship” case is hard, so the EPA is using the second justification.  No.  Seriously.

The plain language of the law makes it clear that inadequate domestic supply of biofuels is the criterion for granting the waiver.  But we have a surfeit of biofuels, if anything: we can produce more of them than can be consumed.

Here’s the gobbledygook the agency uses to justify its decision:

“We interpret the term ‘inadequate domestic supply’ as it is used under the general waiver authority to include consideration of factors that affect consumption of renewable fuel,” the agency wrote in the proposed rules.

Uhm, “consumption” is related to demand, not supply.  But whatever.

The EPA seems inspired by this famous bit from Through the Looking Glass:

‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’

‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’

‘The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.’

EPA is clearly determined to be master of the words in the Renewable Fuel Standard, and make them mean just it what it chooses them to mean.

The Reuters article states that the EPA’s action is sure to draw a legal challenge from the biofuels industry, and that’s no doubt true.

I yield to no one in my loathing for the Renewable Fuels Association, but they have the law on their side in this case, even if the law is indeed an ass. If the rule of law is to mean anything, laws must be enforced as written, not waived at will, especially when the justification for the waivers flies in the face of the black letter language of the statute.

If we really want a country of laws, the laws need to be enforced and followed, not waived.  We need to work to rule.  To bring home to Congress its folly, and to force it to change the law to bring it into conformity with economic reality, the RFS must be enforced, down to the last comma.

And the principle should be applied more broadly.  Obamacare is a prime example.  Ever G*d damned provision on every one of its 2000 plus pages should be enforced, no ifs, ands, buts or waivers, to make manifest its absurdity, thereby making possible a substantive change in the law-and perhaps scrapping it.

Maybe in the scheme of things RINsanity isn’t a big deal.  But it illustrates quite powerfully the degeneration of the rule of law in the US and the increasingly arbitrary nature of American government.