The list of controversial energy issues in Washington, D.C. is a long one. But none may be as complicated to understand as the Renewable Fuel Standard (RFS), a U.S. mandate that gasoline and diesel fuel contain specified amounts of ethanol and other biofuels.
In this edition of Columbia Energy Exchange, host Bill Loveless sits down with Dr. Jim Stock to discuss this complex policy and its future. Jim is the Harold Hitchings Burbank Professor of Political Economy at Harvard University, a former chair of the Harvard Economics Department and a non-resident fellow at the Center on Global Energy Policy. Jim also served on the White House Council of Economic Advisers from 2013 to 2014, where his portfolio included the RFS.
Bill and Jim spoke just days after a May 8 meeting at the White House where President Trump, senators from Iowa, Texas and Pennsylvania, and the heads of the Environmental Protection Agency and the Department of Agriculture reached a tentative deal that would resolve a longstanding dispute between oil refiners and the biofuels industry, especially producers of corn-based ethanol. But the devil’s in the details, as Jim says on the podcast. And as Bill and Jim met, the outlook for the RFS was anything but certain.
For related reading, we invite you to check out Jim's recent paper, “Reforming the Renewable Fuel Standard”, published in February 2018 with the Center on Global Energy Policy.
View the transcript
Bill Loveless: The list of controversial energy issues in Washington is a long one, but none maybe as complicated to understand and difficult to resolve as the Renewable Fuel Standard. A U.S. mandate that gasoline and diesel fuel contains specified amount of ethanol and other bio fuels. Hello, I am Bill Loveless and this is the Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University.
Our guest today is Jim Stock the Harold Hitchings Burbank and professor of political economy at Harvard University, a former chair of the Harvard economics department and a fellow at Columbia Center and Global Energy Policy. Jim also served on the White House Council of economic advisors from 2013 to 2014 where his portfolio included the Renewable Fuel Standard or the RFS as it’s commonly referred to.
He knows this issue as well as anyone I’ve met and breaks it down in a way that’s easy to understand that’s no simple task given the complexity of the topic and best of all we spoke just days after news broke away possible deal at the White House that would end a longstanding dispute between oil refiners and the bio fuels industry over the cost of the program and the extent of it. It’s a deal that would permit the sale of a higher 15% blend of ethanol and gasoline all the year ago according to statements from the White House and the senators.
And it would allow refiners to count exported ethanol toward meeting their RFS requirements, but the devils and the details as Jim reminds us and as we spoke the Trump administration had not yet explained how it would proceed. That said, Jim tells me where he thinks this issue is headed now not only for ethanol, but also for some of the more advanced bio fuels envisioned under the 2005 and 2007 laws that established the program. By the way a big help for me in preparing for this talk was a paper that Jim wrote for the Center on Global Energy Policy in February called reforming the renewable fuel standard. Take a look at it when you have a minute. Now, here is our conversation recorded in Washington while Jim was in town. Jim Stock, welcome to the Columbia Energy Exchange.
Jim Stock: Well, thanks I am delighted to be here.
Bill Loveless: Well, we’re going to talk about the Renewable Fuel Standard and it -- it strikes me as perhaps one of the most intractable energy issues in Washington today one that’s been around for sometime, but has been quite controversial for various reasons. But before we get into that and -- and of course we want to make clear the outside here there has been what some say maybe a deal to address some of these controversial aspects of this standard. But before we get into that, let’s make sure everyone understands what is the Renewable Fuel Standard and what’s been its difficult history?
Jim Stock: Well that’s a great question and I think I would just start by agreeing with you that it is a political evergreen issue and in fact we’ll come back to that, but that actually is one of the major problems that this program is continually mired in politics because of it’s structure, but it’s worth stepping back and thinking about what the original purpose of the Renewable Fuel Standard was and how it was set up. So to do that, you got to put on your prefracking hat and think about oil -- oil imports being high and increasing pre financial crisis hat and we’re sitting here with nine million or more barrels per day of oil imports and what you’re going to do about it and one of the ideas was well gosh we should substitute some of that foreign imported oil which is also a greenhouse gas producing object with some domestic fuels and those domestic fuels should be once they’re to producing lower greenhouse gas footprints and that logic it leads you to think about renewable fuels or bio fuels --
Bill Loveless: As we’re talking I should say back in the years 2005 and 2007, when this program was established.
Jim Stock: Yes. Thank you. There were two acts the Energy Policy Act of 2005 they got this program started and then it was substantially revamped and scaled up in the Energy Independence and Security Act of 2007. So the EISA is the legal -- the statutory framework under which the RFS program actually exists. And the EISA had three goals the first goal was to enhance energy security and energy independence, the second goal was to transition to cleaner fuels lower greenhouse gas footprint fuels in particular. And the third goal was to support rural economies and these three working together gave rise to what we now have as the main pillar of our bio fuels program. It’s not the only part of our bio fuels program it’s certainly back in the 2000s there were other pieces, but this is the main statutory authority that continuous to exist.
Bill Loveless: And how did it work Jim and how did it get the renewable fuels ethanol as well as other alternative fuels into the market?
Jim Stock: So the rural works the way the EISA operates is that it, it mandates a certain amount of fuels of renewable fuels to be used in the fuel supply to be blended into the fuel supply and EPA then through a series of annual rule makings and some discretion that it can exercise turns these annual volumes into a fractional standard. The fractional standard then has to be met by -- by the folks who produced the -- produce our fuels the refiners and -- and through the blending system to actually make sure that we blend in the mandated amount of ethanol. The way that that operates in practice is through something called the RIN system and we’ll talk about this more the RIN systems RIN R-I-N stands for Renewable Identification Number.
Bill Loveless: Thank you.
Jim Stock: So you might be thinking well okay so it’s fine for the EPA to say you have to blend a certain -- number billions of gallons of fuel into the fuel supply well how can they check, how do they make sure that that actually happens and the way that that happens is through this RIN system where every gallon of ethanol and other bio fuels that is blended into the fuel supply produces what is called a RIN and then so called obligated parties which refiners are required to turn in those RINs to the EPA as proof that they actually did the blending that they require too.
So this all operates electronically, but in brief when you produce some ethanol a RIN is attached to it, a RIN is generated when you -- when you blend that into a final product that a consumer is going to use, that RIN is detached it can then be retired to the EPA, there is a market for RIN so if I happen to be short of RIN so I can buy some, if I happen to be long on RIN so that I can sell some. And so the RIN price and the RIN market is the operational feature of how the Renewable Fuel Standard actually works.
Bill Loveless: And -- and this worked reasonably well for some period of time, but then it began to run into a lot of bumps, bumps in terms of difficulties in making the -- blending the alternative fuels into the system without disruption to the various parties involved.
Jim Stock: So it’s useful at a high level especially if we’re going to focus on ethanol which is what gets most of the attention although there are other bio fuels involved in the program too. But if we just focus on ethanol that’s useful to think about there being two time periods and the split date is quite sharp it’s in February of 2013. Before then, ethanol was being used at less than 10% of the -- of the gasoline supply.
The gasoline that you and I and almost everybody in the United States put into their cars is 10% ethanol that’s called E10 -- E10. And -- the reason that we’re using E10 is in the first instance because ethanol is an inexpensive way to boost octane and it also serves as an oxygenate which allows for cleaner burning of fuels. So up to 10% ethanol up to 10% ethanol -- ethanol actually has a price advantage over other alternative additives that would be used to boost octane. And so it’s actually an inexpensive thing to do this is also related to the phase out of a chemical called MTBE which was used as a as a way to as an oxygenate in the early 2000s that was phased out in the energy policy act of 2005 so that then basically -- basically ethanol took it’s place as an oxygenate choice and as the octane enhancer choice. So up to 10% ethanol, this is actually a cheap thing to do. The market does it the market will do it anyway up until 10% ethanol that means there is no cost to this program in terms of compliance. Once you get above 10% ethanol the whole thing changes and that happened around 2013.
Bill Loveless: And that’s when we began to approach this so called Blend Wall?
Jim Stock: That’s exactly right. So there is the so called E10 Blend Wall and as long as we were below the E10 Blend Wall, the ethanol was a cheap thing to use and we were actually generating a whole bunch of extra RINs that were floating around. RINs were in over supply until we had the E10 Blend Wall. And then once your -- once the EPA’s statutory requirements and then the way they implemented them through rule making went above this 10% number, then all of a sudden you’re saying well gosh how am I going to get that additional ethanol out into the market place and you can’t do it through E10 it’s got to be done through higher blends and that raised a whole host of questions.
Bill Loveless: Well -- the thing about the renewable fuel standard too is it, you know it assumed a certain that the gasoline supply in the United States would -- would contain a certain amount a certain volume of gallons of ethanol and other bio fuels. But -- but we’re simply not using as much gasoline as it was anticipated back in 2007. And so there is not as much -- there is not enough gasoline in the market to accommodate the level of -- ethanol and bio fuels that the law would require.
Jim Stock: So that’s actually an excellent point which is that the projections in 2007 of course predated the financial crisis and so they had a much more robust growth of gasoline demand than we’ve seen. So gas -- oil prices went up -- in the early 2010s they were quite high. So between high prices and economic growth we did not see we saw retraction in gasoline consumption rather than the expanse of growth, what that meant is we hit the E10 Blend Wall in a way that hadn’t been anticipated in the original legislation.
Now it’s possible to use beyond 10% ethanol and our fuel supply, but to do that we got to sell this higher blends and that means either E85 or E15 and the practical problem with that is that there is very little dispensing infrastructure. So out here in the East Coast you’ll -- you’ll find very few stations that sell either -- 15 -- E15 or E85. And so there is a practical question of how do you get that additional ethanol into the market place.
Bill Loveless: Right. I’ve read with it maybe 28 states that actually have some sort of a number of gas stations that dispense E15. I want to you mentioned the E15 and of course that’s part of this tentative deal that was discussed with the White House the other day, but before we get breakdown this deal or this tentative deal let me ask you how did you get involved in this issue?
Jim Stock: So I’ve been working in this aspect or that aspect of environmental economics for a while. And when I and in fact going back -- when I first went to graduate school and came from I grew up in Minnesota I’ve been interested in agricultural and economic issues that didn’t dominate my career but agriculture and -- energy issues were ones that originally motivated to go to graduate school. So this was when I got to the White House and was working as a member of the Council of Economic Advisors that was when we actually happened to hit the E10 Blend Wall and everybody started there was time to learn about RINs and there was time to learn about the RFS and let’s try to figure out what was going on and how we how we could administer this program in a responsible and efficient way.
Bill Loveless: And what was back around so you were at the White House 2013-2014?
Jim Stock: Correct. Yeah -- yeah I just remember the CEA 2013-14.
Bill Loveless: Council of Economic Advisers?
Jim Stock: Yeah.
Bill Loveless: Well let’s talk about this deal again I -- I say deal then I catch myself and say tentative deal. The one that resulted from a meeting at the White House it included President Trump and senators from Texas, Iowa, and Pennsylvania as well as the heads of the Environmental Protection Agency and the agriculture department happened?
Jim Stock: Well let me let me step back. Before I answer that directly let me just layout what the problems are the current problems are that this deal would attempt to address. Okay so there is actually if we step out long ways back there is actually a four issues that various stakeholders are concerned about. So one of them is that these prices of these RIN which are these compliance certificates went from very low in 2012 to really fairly substantial so a very substantial and highly volatile --
Bill Loveless: Then what do you mean very low and very substantial?
Jim Stock: So low means pennies before 2012 and now being anything between 30 cents and a dollar or 30 if you look back at -- look back at it historically and for most of last year they’re trading around 70 cents or 60 cents. And this is per gallon so we’re talking about if you put -- try to put that in a metric of -- of fuel that’s a -- you know a substantial a substantial amount that we’re paying for each of these RINs. These RINs are the refiners have to purchase these RINs and then turn them in for compliance or they can actually produce the RINs themselves if they blend, but refiners they don’t do any blending actually have to purchase the RINs.
So there has been a considerable concern among the refiners that actually need to purchase RINs that they’re paying quite a bit to prove compliance with renewable fuel standard. And not only do they feel like they’re paying quite a bit, it’s actually pretty volatile and difficult to predict so it’s kind of hard to figure out for them like gosh what’s my RIN exposure going to be for the coming quarter. So there is volatility and the high level that has led a lot of refiners especially the ones that are exposed without their own blending capabilities to say we got to do something to get RIN prices lower and less volatile. So that point one number is concerned about high and volatile RIN prices by the refiners.
Bill Loveless: And we’ve seen at least one refinery in Philadelphia which says it was driving it out of business?
Jim Stock: That’s right Philadelphia Energy Solutions filed for bankruptcy and one of the issues that’s back in I think it was in February or January and so one of the issues that they claimed was really driving all of this was their high RIN price bill. I do want to put a caveat on it which is that I don’t agree with that analysis. My sense is that the refiners and our analysis which we’ve done pretty extensive work on suggest that their refiners are able to pass along their RIN cost just like all other costs to the downstream purchasers. So there been oil prices fluctuate the refiners pass it along, when labor prices fluctuates cost fluctuate they pass it along, when RIN prices fluctuates they pass that along too. So I would take issue with the PES view, but it’s worth putting it out there because that is one of the drivers of the current negotiations.
Bill Loveless: Yeah and two other issues you said --
Jim Stock: Yeah there is a couple of other issues, so one of the issues from the ethanol producers perspective the ethanol producer’s perspective have really been frustrated by this E10 Blend Wall problem. And there had been expectation that high RIN prices would incentivize the use of these higher blends, that now we’re going to be able to sell higher blend to the discount because they’re going to generate extra -- they’re going to allow us to producer more RINs and we’ll be able to pass that along to the consumer and the consumer is going to be great.
As soon as they great I am going to buy these higher blends, but that hasn’t happened and the main I think in my view based on our analysis the main reason that hasn’t happened is because there is been a lack of increase in blending infrastructure or in dispensing infrastructure basically you need more stations to sell more gasoline and that hasn’t happened so why hasn’t that happened? Well it’s because RIN prices are high which should happen but volatile who can actually count on RIN prices being something that will pay -- if you’re going to tear up your concrete and you’re going to put in a new tank or you’re going to put a new dispensing infrastructure for E15 that’s a multi year payback that you need.
Bill Loveless: So there isn’t -- there isn’t the incentive there for gas station operators and owners to install the equipment they need to sell this E15?
Jim Stock: Yeah, they have an incentive except there is not the certainty that they need that they’re going to get the payback and so we so we’re seeing the situation where RIN prices are high and volatile. The refiners are complaining about that, but it’s providing the incentive for the dispensing of higher blends that would solve the problem by producing -- by generating the additional RINs through sales of higher blends.
And then there is a third problem too which is this high and volatile and RIN price and the continual programmatic uncertainty that’s political has really been hampering. It’s been a real problem for the development of second generation fuel’s technology. So upon the start of the RFS and after the financial crisis recession allow this to happen. There is actually a number of plants that were produced that were producing very low green house gas footprints second generation non food competing fuel feed stocks and they’re turning that in --
Bill Loveless: And this is so called cellulosic material are include cellulosic materials --
Jim Stock: Exactly. These particular ones happen to be cellulosic -- that I have in mind are cellulosic plants, but they are not all cellulosic plants and they are not all ethanol. There is a range of technology out there. The ones that were closest to being market ready happen to be cellulosic using for example the corn stocks and the corn leaves and the left over cabs and that sort of thing because that was the easiest feedstock for them to work with, but there were other -- other feedstock’s it could be used down the road.
These are very low greenhouse gas footprint -- footprint pathways and so they are actually quite good for the environment from a climate perspective. The -- the problem with that is it well though now you’re talking about you’re talking about well okay I’ve gotten this proven technology we think it’s going to work or maybe it’s going to work at scale I am going to have to built a few plants before I get all the kings worked out and then I’m going to have to scale it up and build some more plants.
To do that, I need to have some price certainty that I am really going to get the subsidy that I need from this program. So the program is currently providing a substantial subsidy well over $2 a gallon for those fuels, but the thing is it’s highly volatile and you don’t know whether the program is going to seize to exist two years from now. I am building a plant that’s going to last 20 years I can’t deal with maybe it’s going to be eliminated three years from now or four years from now I can’t tell that to my financial people.
Bill Loveless: Yeah. It’s a very, very, very risky proposition --
Jim Stock: Yeah.
Bill Loveless: so then you got -- so then you had this meeting at the White House where they they came up with the some sort of an arrangement and one of them was the -- the White House, the government, the administration would allow the sale of E15 year around. Well how does -- how does that -- how is that a solution given the -- the problems with E15 that you just talked about?
Jim Stock: One of the impediments to E15 adoption is that some technical reasons that have to do with a particular clause and the Clean Air Act. It has not been available for summer sale and -- and there is something called a Reid vapor pressure one pound waiver which is a offered to E10 but it’s not offered to E15. It’s proponents of E15 will point out well gosh if the consumer is supposed to educated and learn about E15 how can you do that for something that’s only going to be available a few months of the year. And how are we going to get people to install the blending infrastructure if they actually can’t sell E15 from that infrastructure for three months of the year --
Bill Loveless: And it’s not just _____ [00:21:41] there is still this perception I think in the public that E15 is bad for your engine even though EPA has certified that new cars from what the year 2001 are can run this higher blend without any difficulty.
Jim Stock: So there is -- there is that also which is that many, many car or most of the cars that are being produced now are E15 ready, but some of the older vehicles are arguably not E15 ready even though they’ve been certified by -- by the EPA. There is questions that the consumer or the owner might actually have in their heads. So there are these other impediments I think that those impediments are diminishing over time given that for now we’ve been making for many years we’ve been making car through E15 ready. So a lot of the fleet is ready to take E15 at this point, but the -- the lack of infrastructure, the lack of year around fuel is been an issue.
So one of the parts or one of the pieces of the current White House proposal or deal is to make E15 available for year around sale. So that’s -- that’s one that’s one piece of their proposal. Another piece of their proposal, is to do something -- for the refiners to reduce the RIN cost for the refiners and the proposal that’s been floated and we don’t -- we haven’t seen in writing the details of it at this point but what the proposal as it currently stands is I-- s to allow RINs to be generated not just by domestic use of ethanol, but by selling ethanol internationally, so that exporting ethanol actually also generates RINs. Those are the two main pieces of it. And then there is a third part of the proposal that has to do with exemptions that have been given to smaller refiners and scaling back or treating differently the small refiner exemption in the future then how they’ve been treated in the past.
Bill Loveless: And that’s a big controversy because and many have been critical of the EPA for dispensing so many waivers recently a lot more recently than they had done in prior years so --
Jim Stock: That’s absolutely right. So the small refiner exemption waivers have been made retroactive, so it relieves these small refiners retroactively of their responsibility. Well, what that has meant is a practical matter so small refiners have actually they -- that fuel is still being blended it was blended historically into E10 and that generated RINs and all of a sudden you’re saying those small refiners don’t need to go out and buy those RINs or if they have the RINs they can sell them they don’t need to turn them in. So all of a sudden the total pool of RINs that’s available for compliance for the obligated non exempted parties has actually increased substantially and that drives down RIN prices.
Bill Loveless: Yeah. And that’s been a big a big bone of contention. Well, you’ve laid out -- you’ve outlined this arrangement from the White House is would it work?
Jim Stock: Yes. So my -- my concerns are two fold. First of all, both of these are -- and I am -- I want to stress I am not an attorney and I am not a lawyer but from my understanding of this situation is it both all the elements of this deal are really pushing the envelop from a legal perspective. So the clean air act has very clear language in it saying that you grant an E10 -- you can grant a waiver to E10 and it says for ethanol between 9 and 10% or something like that and then you can get this one pound waiver and that’s what it is.
So a plain reading of the statute it’s up to 10%. Now maybe EPA is going to make an argument saying that that substantially that E15 is substantially equivalent to E10, but I don’t know I mean I am not an attorney, there is a lot of talk these days about plain reading of the statute and plain reading the statute is 10% is 10%. So and in fact EPA back in 2011 issued a ruling in the federal register and a legal opinion saying well 10% is 10% and so we can’t apply E15 or EPA waiver. Well I don’t know so that’ll be litigated that will take a few years. Next question then what about the small --
Bill Loveless: You said that we’ll take a few years --
Jim Stock: Yeah take a few years yeah, yeah well they didn’t haven’t even proposed the rules they’re going to have to propose a rule then finalize the rule and then the rule will be litigated. And you know so maybe it’ll be resolved right way by the DC circuit, but I don’t maybe it bounces around for a while maybe it’s remanded there is a there is a long path it’s going to be very complicated --
Bill Loveless: It’s likely to be a solution at any time soon.
Jim Stock: We’re not going to see a solution for a couple of years on this one. So just yeah we’re not going to see a solution for a couple of years on this one a resolution for a couple of years. At least as many issues are being raised on the first issue with a first point which is can you generate a RIN for exports? The EISA if you read the EISA the prolog and the -- the clear meaning of the statute is it we’re supposed to be consuming more low GHG renewable fuels domestically it’s about consumption and market expansion in terms of domestic consumption.
And so allowing -- allowing exports to generate RINs would at least in my view stand -- stand in the way of a clear reading of the statute and in fact by driving down the RIN price by generating extra RINs what it’s actually doing is it providing less of an incentive for domestic consumption. So I I would think that there is a phase -- on the phase of it there is an argument that that this goes not just it’s not just stretching the boundaries of the EISA it’s actually going counter to what the EISA would argue.
And then there is international trade agreement aspects because what we’re doing is we’re saying yeah you know what you can sell this internationally and we’re going to give you a bonus by doing that. So you’re going to sell it -- you used to be selling it at marginal cost now we’re going to give you 10 cents or 15 cents or 30 cents discount that you can pass along. And by the way the Canadians who might be selling ethanol they have to sell at marginal cost we’re going to undercut through their subsidy program. I don’t know my international tax, my international GAT stuff very well, but that doesn’t sound like it where it worked to me.
Bill Loveless: Well I know Bob Dinneen the president of the Renewable Fuels Association he had plotted the agreement and so far as the E15 aspect of it when, but he called the notion of allowing exported ethanol to count toward oil companies RFS obligation quote extremely problematic. He said, “depending on potential implementation allowing exports to quality for RFS compliance could dramatically reduce domestic ethanol demand. Well, most certainly resulting in retaliatory trade barriers in countries importing U.S. ethanol. It sounds like he would agree with what you just said?
Jim Stock: Yeah, I think that that’s reasonable and -- and the mechanism whereby it may reduce domestic demand is that it reduces the domestic consumption reduces the RIN price and therefore the incentive for E15 and E85 sales. So I think that’s I would tend to agree with that statement.
Bill Loveless: No, by the way the -- just the news of this discussion at the White House seemed to have some it seemed to move the market a little bit with RIN, so I was looking back on my old outfit plats which you know say the prices for current year ethanol RINs fail to their lowest level since 2015 and plat assess this so called D6 RINs at 30 cents and that’s a 50% -- 57% drop from the start of the year. This was back on May 8th when the news came out of the White House on this on -- this deal.
Jim Stock: Yeah. So the RIN prices are something that you bank RINs are something you can bank and you can use it for the future years. And that means that they’re sensitive not just the supply and demand in the current year, but we’re expected to supply and demand and expected regulations and one of the fundamental problems with this whole program is that one administration and the administration can change their mind from year to year and different administrations can change their mind and each one of those is going to have an effect on future demand, future RIN supply, future RIN retirements and therefore it’s going to effect RIN prices today.
My view is that this is -- it’s not going to be resolved for a couple of years it’s going to continue to sell market uncertainty it’s clearly not going to make the ethanol producers happy, it has absolutely nothing for those who are interested in second generation low GHT fuels. I will want to make a note that this is a very important part of this equation. If we really step back from the you know inside the belt way stuff that’s going on we think why do we care about this, why let’s just do EVs let’s just get rid of this whole program it’s a complete mess it’s a waste of time. Well the answer is no. EVs are fine EVs are not going to solve or air transport needs for the rest of this century.
For the rest to the century we’re going to need higher energy density, low carbon, liquid transportable fuels for host of applications not just air travel, but also remote construction, military applications, maybe long haul transport, maybe trains you know we’re not going to electrify all the train systems what about marine transport. We need low GHG fuels and they need to come from programs like this. And so we can’t just walk away from it, but this White House deal has nothing in here for second generation. And I -- I really think that the only way to solve these problems is to say we can’t do this administratively we have to do it legislatively.
Bill Loveless: You bring up a point on -- on the environmental aspects. You wrote in OPED in the newspaper The Hill in March that refiners and agricultural interest have been driving the reform efforts. But you added it’s time for the environmental community to engage as well. Why hasn’t that happened that’s happened as much as you think it should have happened?
Jim Stock: Well it hasn’t happened as much as I think it needs to happen, but I think that you’re seeing some recognition of these -- recognition of the importance of moving forward. I think that there is increasing awareness and increasing engagement by some of the NGOs and by some of the those who are interested and concerned about the climate to realize realizing that the -- the RFS has failed second generation. It’s -- there is a narrative that second generation fuels have failed under the RFS. I would say it’s the RFS that’s failed second generation fuels.
The technologies are there their ability to ramp them up it requires subsidies and it requires achieving economies some scale and it requires all of the stuff that we’re used to seeing in terms of driving new technologies that has to happen. But I -- I think I think there is reasons to be optimistic that it could happen if the program were stable. I think that the environmental community is -- is realizing that and it’s realizing that a program that requires long-term technologically investments with big plants they’re going to produce for a long period of time. It requires a different structure than a current year to year rule making that you can’t count on. And if we can move to a program with certainty that’s rule based, that really allows second generation producers to have -- have some sense that they’ll actually get a payback for what they’re doing. I think that’s something it can be appealing.
Bill Loveless: Well, we need to leave it there, but it’s an issue that’s not going to go away any time soon. Jim Stock, thanks for joining us on the Columbia Energy exchange.
Jim Stock: Well thank you very much for having me.
Bill Loveless: And thank you our listeners for tuning in. If you have a minute, rate us or give us a review on iTunes or your preferred podcast platform. And for more on the center for global energy policy go to our web page at energypolicy.columbia.edu or follow us on social media at columbiauenergy. For the Columbia Energy Exchange I am Bill Loveless. We’ll be back again next week with another conversation.