The ethanol mandate is a failed experiment
The U.S. and world energy outlook has changed dramatically for the better since 2005. But none of the thanks goes to the U.S. corn ethanol mandate.
Rather, the shale revolution of the past decade has enabled the U.S. to become the world’s largest combined producer of oil and natural gas and thus moved the country to a level of energy security that was thought impossible a decade ago.
Despite this seismic change that erased concerns over domestic energy shortages once considered certain, some continue to cling to a policy whose time has passed: the federal corn ethanol mandate.
The federal Renewable Fuel Standard, which requires increased blending of corn ethanol into our nation’s motor fuels, is a relic of that time of falling domestic energy production and concerns over reliable and low-cost energy supplies.
As Washington continues talks with the ethanol lobby and refiners over how to modify the mandate to address its many shortcomings, the time has come to simply move on from this failed policy.
RFS proponents sold the law in 2007 as an environmentally friendly answer to dwindling U.S. energy production. Not only would more domestically grown corn ethanol in our fuel supply improve our energy security, they said, it would help improve air quality, create jobs and cut costs at the pump for consumers.
Yet the unanticipated gains of U.S. shale oil and gas production solved those concerns. We now cover enough of our domestic energy demand that we’re exporting oil and gas at historic levels.
Record domestic production has cut energy costs for consumers and manufacturers. And the shift by utilities to abundant and affordable natural gas to generate power has ushered in dramatic greenhouse gas emissions reductions.
The RFS, meanwhile, has failed in its intended purpose of helping our environment, family budgets or the country’s energy security.
Many in the agriculture community as well as conservation and environmental groups, including the Natural Resources Defense Council, Environmental Working Group and others, recognize the deep damage the RFS has caused.
Roughly 40 percent of our corn crop is now used for corn ethanol production. Combined with the loss of grasslands, that’s led to a sharp increase in greenhouse gas emissions.
Most of our cars weren’t built to run on fuel containing greater than 10 percent ethanol. And as ethanol’s presence in fuel damages the engines of boats, motorcycles and other equipment, its lower energy density reduces fuel economy in vehicles by more than 25 percent.
These are failures we cannot afford after 13 years of forcing this mandate on consumers.
And yet we’ve seen the ethanol lobby continue to dig in its heels, fighting with an administration that has otherwise succeeded in rolling back costly and unnecessary regulations.
Efforts this year to curtail some of the mandate’s onerous requirements have led to attempts at so-called compromise solutions, including waiving the requirements for some refiners and capping the prices of compliance credits.
Such policies are sure to fail because they represent even more heavy-handed market interference, government action at its worst. What was true in 2005 remains a fact today: When the government attempts to pick winners and losers in a market, American consumers end up losing.
Instead of continuing to look for ways to fix a broken and unfixable government experiment of the past, it’s time for Washington to embrace a new energy reality that’s moved on from the problems the RFS sought to answer. It’s time to repeal this ethanol mandate and put it behind us.