San Francisco billionaire Tom Steyer and other national political figures have sold out California’s economy by supporting a federal mandate that forces billions of gallons of corn ethanol to be mixed into gasoline every year. The mandate, also known as the Renewable Fuel Standard (RFS), has already imposed $13.1 billion in higher fuel costs on Golden State consumers since 2005, with another $28.8 billion to come over the next 10 years. That’s the core finding of a new report from the Center for Regulatory Solutions (CRS), a project of the Small Business & Entrepreneurship Council, where I serve as president and CEO.
The RFS is effectively imposing a $42 billion “ethanol tax” on California consumers, and the vast majority of the proceeds are going to out-of-state ethanol producers in the Corn Belt of the Midwest, according to an economic analysis commissioned by CRS. The ripple effects of this huge wealth transfer include $31.6 billion in lost GDP growth in California by 2024, more than 17,000 lost jobs per year, and hundreds of millions of dollars in higher costs for dairy and poultry farmers, because rising demand for corn ethanol has increased the cost of corn-based animal feed. The CRS analysis also found that instead of cutting emissions – as RFS supporters have promised – California’s consumption of corn ethanol has actually generated an extra 6.3 million metric tons of carbon dioxide-equivalent since 2005 – roughly the same as putting 1.3 million cars on the road for one year – and more than 100,000 tons of additional smog-forming emissions.