WASHINGTON — RFA President and CEO Bob Dinneen released the following statement in response to a conference call held today by the American Petroleum Institute (API), discussing the results of a flawed study it commissioned by NERA Economic Consulting (NERA) on the impacts of the Renewable Fuel Standard (RFS).
“It’s déjà vu all over again,” said Dinneen. “This study is virtually identical to a study that NERA published for API in 2012. The conclusions of both analyses are completely divorced from reality. The 2012 study claimed the fuel market would be pushed into a death spiral by the RFS, and that the program would cause 2015 GDP to fall by a whopping $770 billion. The 2012 study also ridiculously suggested that, in response to implementation of the RFS, diesel fuel supplies would fall by 15 percent, resulting in a 300 percent increase in diesel fuel prices and a 30 percent increase in gasoline prices. API was wrong in 2012, and it’s wrong in 2015.
“This newest API study contains many of the same fatal flaws that plagued the 2012 study. This study claims that gas prices will rise by $90 a gallon and diesel will rise by $100 per gallon. It foolishly assumes EPA will not ever utilize its cellulosic waiver authority to partially reduce the advanced and total RFS volume requirements. And it also assumes obligated parties would purchase a RIN credit at any price rather than making modest infrastructure investments to expand renewable fuel distribution.
“In the end, the new API study has no basis in reality and suffers from the same methodological maladies that prompted Iowa State Professor Bruce Babcock to write in response to the 2012 study that ‘the NERA compliance strategy is not feasible unless obligated parties formed an illegal cartel to reduce sales to boost prices.’”