Posted on 01/07/2016 10:51:27 AM PST by Kaslin
The ethanol mandate, known formally as the Renewable Fuel Standard or RFS, is an object lesson in misguided government policy surviving long after its original rationales have been destroyed.
The national security rationale was that oil was scarce, but now we're the world's leading oil producer and have begun exporting crude.
The environmental rationale was that ethanol would reduce greenhouse gas emissions, but since a landmark study was published in Nature in 2008 we've known: "there's little doubt that ethanol is making global warming worse."
Even the jobs rationale fails. Per the Congressional Budget Office: "roughly the same amount of corn ethanol would be used in 2017 if fuel suppliers had to meet requirements equal to EPA's proposed 2014 volumes or if lawmakers repealed the RFS, because suppliers would probably find it cost-effective to use a roughly 10 percent blend of corn ethanol in gasoline in 2017 even in the absence of the RFS."
Got that? Even with the decline in oil prices, ethanol is the most cost-effective octane booster. The era of 10 percent ethanol gasoline, E10, as America's most common transportation fuel isn't going to end if the RFS is repealed. Those ethanol jobs aren't going anywhere.
But that doesn't mean this is not a high stakes issue, because under current law the mandate is set to sharply increase, with devastating consequences.
The Congressional Budget Office estimates that if the mandate hits as scheduled under current law in 2017, it will raise prices at the pump 30 to 51 cents a gallon for diesel and 13 to 26 cents a gallon for E10.
That's a lot of money to spend for no environmental benefit.
Even Al Gore has admitted the mandate was a mistake. Gore supported it because: "I had a certain fondness for the farmers in the state of Iowa because I was about to run for president."
Unfortunately, many 2016 candidates are repeating Gore's mistake.
Hillary Clinton and Bernie Sanders are enthusiastic supporters, as is Martin O'Malley - despite the fact that just a few years ago he begged the EPA to suspend the mandate because of the devastating impact it was having on the cost of feed for Maryland poultry producers.
On the Republican side, the ethanol industry created a group called America's Renewable Future (ARF) and hired the governor of Iowa's son to run it. The group secured early support for the RFS from Ben Carson, Chris Christie, Mike Huckabee, Rick Santorum, and Donald Trump.
Then they added John Kasich, who delightfully explained at an Iowa town hall: "I'm for your Renewable Fuel Standard. I've already sold out on that one."
Jeb Bush and Marco Rubio would maintain current law through 2022, which until recently earned them a "needs work" score from ARF. The industry has since deemed that position acceptable in their final scorecard.
That leaves Rand Paul and Ted Cruz as the industry's named enemies, but the latter is leading in the polls.
Cruz recently reiterated his support for actively phasing the mandate down to zero - but ARF, which had been attacking him for taking that position, instead celebrated it. Considering the CBO analysis that a freeze, let alone a phase down, would be economically equivalent to repeal, it suggests the industry is trying to position itself to spin a Cruz victory.
Cruz did also say in a Des Moines Register op-ed that he intends to use anti-trust enforcement to enhance market access for ethanol, including blends of E25 and E30. Cruz claims that higher ethanol blends "could prove quite popular with American consumers, who are increasingly concerned with fuel economy." That's odd because ethanol has about 34 percent less energy per unit volume than gasoline, therefore higher ethanol blends will have worse, not better, fuel economy.
Still, Cruz's position is essentially a prediction, however unlikely, about what would happen in a free market without any energy mandates or subsidies, not a retreat from his plan to repeal the RFS.
No matter who wins Iowa, it is increasingly clear that the RFS is no longer an automatic political imperative for presidential candidates - and that's great news for everybody who fills a gas tank.
Ethanol bad, butanol good
Ethanol is STUPID. It harms the environment. It’s bad for engines. It drives up food prices and has hidden cost for taxpayers. It’s also completely unnecessary.
Bad policy. Period.
Ethanol sucks, it drives fuel prices up (irony here is we can’t even make it, it has to be imported from other parts of the country, which means you also pay the additional costs of transportation); and it lowers engine efficiency and mileage. A bad deal all around.
Also, it is an incredibly stupid idea to rely on fuels made from plants. All you need is one bad blight, pest, disease or bad weather conditions to affect production and you’re screwed.
So they admit it was a policy solely based on getting votes.
Spread the word among muslims in America that every time they buy gasoline, they’re buying liquor and the imam-in-chief will issue an EO to outlaw gasohol.
It’s smart. It’s a good idea just to say stuff to get votes and give money to politicians to make money off their policies. I’m told that every day on FR.
I agree with you.
Add to that the fact that ethanol production increases demand for corn, driving up the cost of food products that are, or depend on, corn. Furthermore, dilute gasoline with an additive that’s 40 percent less efficient than gasoline. I’ve been curious as to what kind of mileage I’d get on my vehicles if I were running on “E-100” (100%) gasoline.
Buying votes.
We have local gas stations that offer real gas, and we pay the extra $ for it. I’d never put bad gas in our vehicles or small engines. Friend of mine in Milwaukee has a garage full of ruined small engines (snow blowers,etc), they can’t get real gas there.
Your friend needs to check with Lowes or some Farm equipment store for some additive that he can mix with the gas for the small enginges
Thanks! I was just visiting them this week and they were lamenting the 2 broken snow blowers in the garage. They had to hand shovel the snow from a week ago. My friend also has trouble with lawn mowers of course. It’s a shame what the ethanol lobby has done to everyone. I am sure our engines last a long time because we only use real gas.
While the production of fuel ethanol has increased the demand for corn, it has also increased the supply.
Oh, and ethanol isn't 40% less efficient than gasoline; it has about 40% fewer BTU's per unit, but it burns much more efficiently, so the mileage loss in a properly tuned vehicle is closer to 10%.
What's wrong with ethanol is its business model of applying its resources to lobbying for government favors rather than to developing a product attractive in the marketplace.
Not to mention that it is incredibly bad for internal combustion engines...
Yes, the questions were rhetorical.
I used to own an “FFV” vehicle. I would consistently drop from 20mpg to 16mpg whenever I filled up with E85. No idea why anyone (who wasn’t a corn grower or ethanol producer) why anyone would intentionally use it.
The government's notion that it could "mandate" that ethanol be used in an engine not optimized for it represents bad science and even worse public policy.
This whole ethanol additive continuation is because Iowa is the first Primary state.
They should remove the state to 45th or so on the calendar.
All the candidates have to pander to the corn farmers to get a leg up on the Iowa primary.
A pox on all of them.
—> the mileage loss is closer to 10%. <—
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If adding 10% alcohol to your fuel reduces your mileage by 10%,
then how is anybody - “saving” - anything?
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