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Commentary: Ethanol Mandates Bad for Consumers and the Environment

By H. Sterling Burnett, Ph.D., KERA 90.1 commentator

http://stream.publicbroadcasting.net/production/mp3/kera/local-kera-478213.mp3

Commentary: Ethanol Mandates Bad for Consumers and the Environment

Dallas, TX –

Congress should give America's consumers a break at the pump in the pending energy bill. However, special interests - and the legislators beholden to them - are once again loading the bill down with pork barrel projects.

Subsidies to - and mandates for - particular energy sources are usually giveaways to influential political donors or key constituencies and almost always result in more economic and environmental harm than good.

Ethanol is a prime case in point. Ethanol's advocates have long argued that increasing the amount of ethanol used in America would be a boon to the economy, reduce our dependence on foreign oil and improve air quality. Yet, more than two decades and tens of billions of dollars in subsidies, tax credits and fuel mandates have done little other than to enrich the multibillion dollar agri-giants that produce ethanol. In return, agri-businesses have been major campaign contributors to key farm state legislators.

The economic impact of ethanol subsidies is negative. One report by the U.S. Agriculture department determined that every dollar spent subsidizing ethanol costs consumers more than $4. The recent rise in oil prices, combined with improved growing methods and distilling technologies have made ethanol slightly less expensive than gasoline at the wholesale level.

However, this does not include the costs of corn subsidies or ethanol's tax credits. Nor does it include the added costs involved in transporting the fuel. Because ethanol absorbs water, it cannot be shipped through existing pipelines used to transport unblended gasoline - the water it absorbs could separate causing pipelines and fuel lines to freeze, and perhaps burst, during cold weather. And when world oil prices fall again, as they certainly will, ethanol's current wholesale price advantage will evaporate altogether.

Worse, most studies show that it takes more energy to produce a gallon of ethanol than the energy it produces - a net loss of energy. For example, a study published in the journal Natural Resources Research in early July found that ethanol produced from corn requires 29 percent more fossil energy than the fuel produced; switch grass requires 45 percent more fossil energy than the fuel produced; and wood biomass requires 57 percent more fossil energy than the fuel produced. Thus requiring that the U.S. use five to eight billion gallons of ethanol - a mandate that Congress is currently considering - means burning more, not less, imported oil and natural gas.

From an environmental standpoint, ethanol is no clear winner either. Ethanol has been blended in gasoline in some cities to reduce carbon-monoxide emissions to meet EPA clean air requirements. However, improved vehicle engine performance and fleet turnover were already resulting in reduced CO levels. More importantly, while ethanol reduces CO, it increases the emissions of volatile organic compounds (VOC), which are a component of smog. As a result, cities that may have come into compliance for CO levels even without an ethanol mandate, may wind up falling into non-compliance with the EPA's VOC and ozone standards due to the current mandate - and these problems would spread nationwide if the Congress expands the ethanol blending requirement. In addition, when ethanol is burned, it emits one chemical which the EPA considers a probable human carcinogen and another which damages plants.

Ethanol would likely disappear from the marketplace absent federal subsidies and mandates. Let's keep corn on our plates, not in our gas tanks.

 

Sterling Burnett is a senior fellow with the Dallas-based National Center for Policy Analysis. If you have opinions or rebuttals about this commentary, call (214) 740-9338 or email us.