The Hidden Cost of a 20-Year-Old Policy: How America Pays $183.62 Per Year for the 2005 Renewable Fuel Standard

By Jared Whitley
Wednesday, 24 June 2026 06:32 AM EDT

Recently I had the opportunity to re-visit Washington, D.C. – the 20th anniversary of when I moved there to work in the U.S. Senate.

Beyond the personal reflections of all the years (and ahem pounds) I have added since then, were the reflections of a more global nature.

The world was a very different place 20 years ago.

We were locked in two seemingly intractable conflicts in Iraq and Afghanistan.
America was not the energy powerhouse it is today.
Thanks to President Trump and our domestic industry, we’re now the biggest oil-producing and oil-exporting country globally.
Fears over “climate change” were attracting more bipartisan concern in the mid-2000s, whereas now, most Republicans have figured out that Al Gore was overhyping threats to make money and that we don’t need to send ourselves back to the Middle Ages in order to cope with slightly rising temperatures.

Despite this, we’re still stuck with some very bad policy from that era, like the 2005 Energy Policy Act.

This legislation was sold on the idea that ethanol subsidies would reduce greenhouse gas emissions and reduce reliance on imported oil. Now, those two concerns are outmoded and dated.

And the regulatory subsidies wrapped up in it haven’t helped either the environment or gas prices, which need to come down before November if Republicans want to avoid the electoral slaughterhouse.

The easiest way to do that is to reduce requirements to blend ethanol into the nation’s gas supply (known as renewable volume obligations, or “RVOs”), and the alternative, where refiners are required to buy ethanol credits (“RINs”) where not “enough” blending can occur.

We can do this while still complying with the Renewable Fuel Standard (or RFS) — though the standard itself should be repealed or at the very least fixed.

At the bare minimum, Congress should reject calls to allow the year-round sale of E15, gasoline that’s 15% ethanol.

High RVOs and even more ethanol being blended into gas amount to hidden taxes on energy we all use at a time when Americans desperately need relief.

The RFS already adds about $0.20 per gallon of gas, according to the Energy Policy Research Foundation. Additional requirements — unless we put the kibosh on them — would add another $0.27.

Combined that’s about $0.47 of totally avoidable costs per gallon, or an average $183.62 per capita annually, everywhere across America.

The average American family of four is paying about $734 a year in hidden RFS costs, at a time when life is more unaffordable than ever.

It turns out that what seemed like a good idea in 2005 no longer works in 2026.

Lest anyone underestimate the danger of gas prices continuing to hover over $4.00 a gallon following the gas spike because of war in Iran, Trump’s disapproval on gas prices is 76% in recent polling.

That figure exceeds Joe Biden’s worst number on the same issue, which was 72%.

Scraping $0.47 off this would make a big difference, though, including for our own voters.

Rural Americans drive about 30% more miles per year than urban Americans.
And of the 15 highest per-capita RFS cost states, 13 are Republican-held or Republican-leaning.

A family of four in Alabama pays an estimated $1,092 a year in hidden RFS costs. Keeping rural voters — and swing voters — happy will be essential to hold Senate seats in states like Texas, Georgia, and Maine.

But right now, the RFS looks set to keep families of four in those states paying over $800 a year for gas.

It’s tough for Republicans to fathom how Graham Platner or James Talarico could win.

But if they do, that additional $800 cost will undoubtedly be a big part of the reason why.

And if you take that $800 cost off the table, it’s feasible that the GOP could win in a year where the net negative for Republicans at political trackers is -17, but for Democrats it is -19.

Before anyone worries that rolling back big ethanol blending requirements will hurt the GOP, it’s worth remembering that in recent years, the entire political calculus surrounding the RFS has been proven wrong.

Sen. Ted Cruz, R-Texas, has long been anti-mandates-for-renewables, but he still won the Iowa caucuses in 2016.

Kamala Harris lost Iowa by more than 13 points in 2024.

Iowans vote on a great deal more than ethanol policy, perhaps little surprise with hog and soybean farmers not benefiting from it, and the state becoming home to big tech, retirement planning, and wind farm businesses.

Yes, the world was a very different place 20 years ago.

Just as Republicans have realized the folly of pro-amnesty immigration policies, and much of the “nation-building” we engaged in in the Mideast, we must recognize the folly of old and busted energy policy.

The only renewables Washington Republicans should be worried about bolstering are their congressional majorities.