Time to Put Ethanol Out of Our Misery
Full disclosure: I’m a fan of single-batch, barrel-aged Kentucky ethanol.
But ethanol in motor fuel is a scam perpetrated by politicians meddling in multiple markets at the expense of taxpayers and consumers to benefit special interests – and themselves.
The Renewable Fuel Standard mandating the inclusion of (primarily corn-based) ethanol in the nation’s fuel supply is arguably Washington’s worst example of crony capitalism. Ethanol’s use in motor fuel is morally-, economically- and environmentally-indefensible.
Federal farm and ethanol policies shower tax and household dollars on corn growers and ethanol refiners to produce an inferior product that we are forced to purchase, increases fuel prices, provides less energy for our money, adds water to gas tanks, inflates food prices and degrades the environment.
In return, giant agri-businesses lavish campaign money on Republicans and Democrats to keep taxpayer and consumer cash – and ethanol – flowing. The industry’s largesse, its network of lobbyists and Iowa’s early role in the presidential selection process are the primary reasons the ethanol mandate survives. The corn-based fuel is a $5 billion cash cow for Iowa alone. Politicians can be bought for far less.
President Donald Trump, once thought to be anti-RSF, appears to have abandoned even incremental reform of the RSF by caving to heavy pressure from lawmakers and agricultural and ethanol industry groups. Washington’s most-militant, pro-ethanol shill, Iowa’s Republican Senator Charles Grassley insists that undermining the RSF is unacceptable – never mind that small refiners find compliance far too expensive, will be forced to eliminate hundreds of jobs, or close, threatening some regional fuel supplies.
In a major policy shift, President Trump has suggested that his administration may allow a year-round blend increase to 15 percent ethanol. If mandated, Washington’s crony culture will have prevailed — again.
Ethanol is a case study in the negative effects of government market tinkering. Among corn-based ethanol’s significant drawbacks is that the artificially-inflated demand for corn to produce ethanol drives up global food prices that spur civil unrest in parts of the world.
Ethanol’s energy value is only about 70 percent of the same volume of gasoline, and corn ethanol may require more energy to produce and transport than it releases when burnt.
A decade ago, environmental groups vocally advocated ethanol. But, today, informed environmentalists don’t like it. Environmental watchdogs, including the National Wildlife Federation, are demanding complete overhaul of the deeply-flawed RFS.
Ethanol not only lacks an environmental benefit, but, because it evaporates more quickly than gasoline, its use raises smog levels. The EPA admits that burning ethanol significantly increases ozone precursor emissions. Furthermore, encouraged by farm policies and ethanol mandates, farming of marginal land and the overuse of farm fertilizers and pesticides increases agricultural runoff, corrupts rivers and streams and strains limited water resources.
Free markets alone should determine winners and losers. If ethanol were as good as corn growers, ethanol refiners and industry lobbyists claim, their product wouldn’t need government mandates for inclusion in America’s fuel supply.
Without mandated usage, ethanol would lose. The Renewable Fuel Standard should be repealed.