Ethanol mandate’s out of gas

Thanks to advanced recovery methods, the U.S. is now the world’s largest producer of both gas and oil. And burning biofuels increases the amount of greenhouse gases.

A decade ago, President George W. Bush signed a bill creating the Renewable Fuel Standard as part of the Energy Policy Act of 2005, mandating that a certain amount of ethanol and other biofuels be blended with gasoline and diesel fuel. The Energy Independence and Security Act that followed in 2007 greatly increased the ethanol mandate.

Such legislation aimed to accomplish two primary goals: to reduce U.S. oil imports; and to reduce carbon emissions based on the claim that although burning ethanol admittedly releases carbon dioxide into the atmosphere, it is “carbon neutral” since growing the corn from which ethanol is derived removes carbon dioxide from the atmosphere.

These rationales, even if they once made sense, no longer do. First, thanks to advanced recovery methods such as fracturing and directional drilling, the United States is now the world’s largest producer of both oil and natural gas. Increased domestic production combined with improved energy efficiency means that the country no longer depends on imported oil to meet U.S. energy demand. Indeed, the United States is now able to export energy. Second, the claim of carbon neutrality turns out to be wrong. A recent study published in the journal Climate Change, finds that the crops used for biofuel absorb only 37 per cent of the carbon dioxide that is later released into the atmosphere when the plants are burnt, meaning the process actually increases the amount of greenhouse gases in the air.

According to University of Michigan professor John DeCicco, one of the study’s authors, “When you look at what’s actually happening on the land, you find that not enough carbon is being removed from the atmosphere to balance what’s coming out of the tailpipe. … When it comes to the emissions that cause global warming, it turns out that biofuels are worse than gasoline.”

There are two additional problems as well. Mandating the use of ethanol increases the cost not only of manufacturing automobiles but also of driving them. Ethanol is so corrosive that it eats through fuel-pump diaphragms, fuel lines, and even metal parts. Proposals to raise the mandate from 10 percent of ethanol in gasoline to 15 percent would damage many engines on the road today.

Then there is the impact on food prices of mandating that 40 percent of U.S. corn production, America’s principle food crop, be allocated to biofuels. In 2015, the mandate called for 15 billion gallons of ethanol, which required over 5 billion bushels of corn. The result of this diversion of corn production to ethanol raised the price of beef, pork, chicken, turkey, eggs, fats and oils, cereals and dairy products. Of course, those most affected by rising food prices are the poor, who must allocate a larger proportion of their incomes to food purchases.

The federal ethanol mandate is the worst sort of crony capitalism, requiring taxpayers to subsidize fuels that could not survive in a free market. It punishes the poor as it lines the pockets of agribusinesses that produce the biofuels. The best policy would be to scrap the ethanol mandate altogether. If that is not politically possible, at least it should be reduced from 10 to 5 percent.