The great ethanol scam and how it threatens our cars.
Earlier this year, the Environmental Protection Agency issued another one of those announcements read exclusively by government bureaucrats and green policy wonks. The EPA decided to delay a decision to increase the concentration of ethanol legal in gasoline from 10% to 15%. So-called E15 fuel would have to wait for approval until November.
It was a little-read regulatory decision that barely made a splash in the media. But it was also a rock thrown at Washington’s hornets’ nest of food and agricultural lobbyists. “We are disappointed,” warned food giant Archer Daniels Midland. “We find this further delay unacceptable” and a “dereliction of duty,” harrumphed ethanol lobbying group Growth Energy.
By delaying the decision, the EPA punted on a crucial decision. The pressure brought to bear against the agency by the agriculture industry has been incredible. It’s also been applied well; the EPA will most likely still approve E15 fuel in the fall.
That’s bad news for any American who likes to drive. In a country powered by the automobile, E15 is an enormous question mark. Since the 1970s when ethanol was first regulated by the feds, concentrations of alcohol in fuel above 10% have been illegal. But the government, lost in a dream world where cars can run on corn, has tied itself in regulatory knots trying to force ethanol into the fuel supply.
The history of ethanol is a sad torrid affair of crony capitalism and green fantasies. By jumping in bed with the agriculture industry and blindly slapping on new regulations, the government artificially propped up an industry and put itself in a bind from which there may be no return.
From Suing Toyota to Subsidizing E15
Across America, pumps at gas stations are emblazoned with the words, “Contains 10% Ethanol.” That’s no free market innovation. Since the 1970s, the federal government has heavily subsidized the production of “gasohol”—a blend of 90% gasoline and 10% ethanol that reduces tailpipe emissions. For decades, progressive politicians and environmental groups have revered ethanol as a miracle additive that will help purify America’s air. “No country has ever gone to war over ethanol,” reads one sign on the Washington, D.C. Metro subway.
There’s just one problem: Ethanol fuel is wildly inefficient. The amount of corn required to soak the fuel supply is massive. To shift America’s car culture entirely from gasoline to gasohol would require 700,000 square miles of land growing corn exclusively for ethanol production. That would mean converting one-fifth of the United States into a sprawling corn farm.
Then again, the government never found a green boondoggle it didn’t love. For five years now, Congress has been mandating that the fuel supply be diluted with ethanol. The Energy Policy Act of 2005 required 7.5 billion gallons of ethanol in the fuel supply by 2012. A Democratic Congress went a step further in 2007, mandating 9 billion gallons by 2008, 15.2 billion by 2012, and 36 billion by 2022.
Unfortunately, that whole Economics 101, supply-and-demand thing got in the way. The maximum amount of ethanol that can be produced to meet demand, called the “blend wall,” is expected to level out at 15 billion. That will make it impossible to meet the government’s mandates.
The agriculture industry, represented primarily by Archer Daniels Midland and Growth Energy, spied an opportunity. Why not increase the legal gasohol concentration from 10% ethanol to 12% or even 15%? That would immediately ignite ethanol production and allow the government to meet its mandate. More importantly, it would make Big Agriculture some serious money.
The EPA looked ready to raise the limit until science finally intervened. A study surfaced by the National Renewable Energy Laboratory from 2008 that found E15 ethanol caused a raft of problems in cars, including a loss of fuel economy and spikes in exhaust temperatures. Meanwhile the higher concentration of ethanol did nothing to reduce tailpipe emissions. The study also found problems when E15 fuel was used in lawn trimmers.
The car industry exploded in outrage. Most car warranties only cover E10, which could leave customers stuck with hefty bills if their engines were damaged. A study done by the Alliance of Automobile Manufacturers found E15 “made engines run hot, compromised catalytic converters, and even damaged cylinder walls.”
To its credit, the EPA ultimately delayed its decision in order to review the science. But in the meantime they’ll have an army of powerful agricultural lobbyists leaning on them. Even supported by its scaffolding of government subsidies and mandates, the ethanol industry is collapsing. The recession shuttered several ethanol companies. Others were gobbled up by oil giants at bargain prices. Some estimates suggest ethanol producers are losing 10 cents on every gallon of gasoline. This is all despite the fact that 25% of corn grown in the United States goes towards ethanol production.
The agricultural industry needs E15. And if history is any indication, it’ll probably get what it wants.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online