CBO: Renewable Mandate Will Push Fuel Costs Higher

June 27, 2014 By Kirsten Korosec

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The US Renewable Fuel Standard will push gasoline prices up to 9 percent and diesel fuel as much as 14 percent by 2017 if Congress doesn’t repeal the law, according to a Congressional Budget Office analysis.

The price of E10, the most commonly used transportation fuel in the United States, would increase by 13 cents to 26 cents per gallon, or 4 percent to 9 percent. The price of E85 would decline by 91 cents to $1.27 per gallon, or 37 percent to 51 percent, according to the analysis.

CBO’s analysis says fuel refiners will have to more than triple their use of advanced biofuels by 2017 to comply with the mandates, which are growing each year,  under the Energy Independence and Security Act.

The requirements of the Energy Independence and Security Act will be hard to meet in future years because of the limited supply of cellulosic biofuels and the amount of ethanol that older vehicles are said to be able to tolerate, the analysis says.

Fuel suppliers have struggled to meet the annual cellulosic biofuels requirement because making such fuels is complex and costly, CBO says. While production capacity has expanded, only a handful of facilities are operating.

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