Most who wished to reduce emissions of carbon dioxide believed mixing some ethanol from corn with our gasoline would do that and reduce our dependance on foreign oil as well. Not too many years after the law went into effect in 2005 scientists learned that when all aspects of corn growing and conversion to ethanol were considered no reduction in CO2 was achieved. Soon our dependance on foreign oil dropped precipitously
Our government has often had problems when it attempted to control markets. Capitalism requires a market free to establish prices based on demand.
The Energy Policy Act of 2005 mandated the first requirement that renewable fuels be mixed into America’s gasoline supply. Additional acts such as the Energy Independence and Security Act of 2007 dictated just how many gallons of primarily corn based ethanol be mixed into the nations supply. Legislators, believing they could anticipate demand, required 15 billion gallons of corn based ethanol to be mixed into our fuels by 2022, along with 21 billion additional gallons of non-corn biofuels. These are normally referred to as cellulosic ethanol and are usually created in laboratories generated by bacteria. Cellulosic ethanol did not exist in large quantities then and now appears it never will regardless of how hard blameless bacteria have tried.
This was a gift to corn growers that remains to this day and likely accounts for 25 to 50 cents in the price of corn which raises our food prices and penalizes those who raise cattle and hogs for whom corn is a staple of these animals diet. A failed promise of the law was a decrease in fuel prices. The reverse has been true.
The Environmental Protection Agency (EPA) has been in charge of carrying out the legislative mandates altered through the years making concessions to the unworkable aspects of multiple pieces of legislation, Oil refiners required to blend these fuels can buy exemptions called Renewable Identification Numbers or RINs to avoid following the laws precisely. Kind of how Al Gore would sell you trees he would plant for you to offset emissions from a private jet flight around the world. If he is still doing it he may have made another fortune on the 400 private jets that landed in Glasgow for COP 26.
The changes EPA has made have satisfied no one. The corn growers are furious when blending exemptions are given and the oil industry goes crazy over increasing ethanol in gasoline which above 10% can cause engine damage.
The scientific and economic reality is that ethanol is much more costly to produce than gasoline, while providing 27 per cent less miles to a gallon as compared to regular gasoline. Hence consumers have to purchase more fuel to drive the same distances, and is why consumers often are willing to search for gas stations with ethanol free fuel.
Despite a diverse mix or organization opposed to the ethanol mandate, the strong lobbying arm combined with the political importance of the geographic region where America produces corn make ethanol policy the perfect example of focusing on beneficial political policy as opposed to economic progress.
The ethanol mandate is a broken policy that is in need of urgent reform. It does not appear that the current administration has any interest in making effective changes. Perhaps the Congress elected next year may provide relief to average Americans from unworkable and costly government regulations. Quite simply the RFS is causing much more harm than good to America’s economy, cars and environment.
If the ethanol mandate were repealed in its entirety, it would spur a healthier market that promotes risk taking and entrepreneurial activity rather than government dependance for near term survival through favorable policies and tax treatment.
Writing all the way back in 2013 Nicolas Loris, formerly Deputy Director of the Thomas A. Roe Institute said “Repeal all transportation fuel and technology subsidies. Use the repeal of the mandate as momentum for greater reform in the energy sector that further levels the playing field for all energy companies and technologies. Congress should remove preferential treatment for all transportation fuels and technologies.
He was correct then and even more so today.