UT Institute of Agriculture study authors Drs. Daniel G. De La Torre Ugarte and Burton C. English found that from an environmental and energy security perspective, subsidies and mandates for corn ethanol would have been better and more effectively directed towards advanced biofuels.
The National Farmers Union and ethanol group Growth Energy, however, disagree. Both groups criticized the new study on Thursday, suggesting its design was flawed.
"Clearly this study was published with an agenda and without regard to the facts," said co-chairman Tom Buis. "Slapping a new title on this previously discredited research won't change the facts."
According to De La Torre Ugarte and English, the study was a look at RFS impacts on the broader economy and the environment.
"Our analysis shows that the RFS has created more problems than solutions, particularly with regard to hampering advancements in biofuels," De La Torre Ugarte said. "Corn ethanol was presented as a 'bridge' to advanced biofuels and a means of reducing GHG emissions. However, the reality is clear that this policy has been a bridge to nowhere."
English said corn ethanol, along with decreased demand of transportation fuels, has restricted the growth and maturation of the advanced biofuel industry, resulting in fewer environmental and economic benefits.
The authors also determined that the corn ethanol industry has received almost $50 billion in cumulative taxpayer and market subsidies since 2005, providing evidence that the industry "cannot survive in any real commercial sense without mandated fuel volume requirements and RIN markets."
Growth Energy, however, countered subsidy comments with statistics on the alternative. "While the ethanol industry voluntarily gave up its tax credits in 2011, oil companies have received government handouts for over a century," Buis said. "They currently receive $5 billion in subsidies a year in the U.S., and hundreds of billions worldwide."
In the study, the researchers provide policy recommendations for improving the RFS to help make the transition to advanced biofuels possible. The report says that for advanced biofuels to enter the market, an investment-based mechanism is recommended to overcome capital intensity and technology risk.
According to NFU, the study's recommendation that the RFS be eliminated and replaced with an advanced biofuels program would actually create more problems.
"The proposed changes would communicate that Big Oil can maintain its monopolistic stranglehold on the transportation fuels industry," NFU President Roger Johnson said. "The study's recommendation that a new, improved biofuels program should be erected in place of the RFS is extraordinarily naïve.
"Unfortunately, the petroleum industry interests who financed the study understand that passing any sort of reasonable policy in the current dysfunctional political climate is simply impossible."