Reality finally impacting ethanol requirements

The EPA has reduced the amount of ethanol that must be used in gasoline. The federal requirement is based on absolute volume of ethanol and not the amount of gasoline sold. Thus, even though gasoline use dropped instead of rising, the amount of ethanol has to increase. This would force us to use E15, which would damage many auto engines on the road.  The AAA asserts that only 5% of the light trucks on the market can use E15.  That linked article also says E15 actually has twice as much corn (ethanol) as E10.

A small victory for consumers who buy gas, everyone that owns a vehicle with an engine that otherwise would be damaged, and the poor who spend a disproportionate share of their income buying artificially high-priced corn.

Other good news:

Another article points out EPA Trims Ethanol Mandate for First Time, Corn Prices Fall.  Good.

If that tiny 1.1% drop in futures prices holds or increases, that means poor people around the world won’t be quite as impoverished.

The Wall Street Journal points out Big Ethanol Finally Loses.

In addition to the crony capitalists suffering a major defeat, there are other benefits to society. Consider these wins, according to the WSJ editorial.

Because the environmental damage will be less than it otherwise would be, the environment wins:

But a growing body of scientific evidence is showing that ethanol consumes so much energy and fertilizer, and requires planting so much marginal cropland, that the impact on air quality is at best neutral and on water quality may be negative.

(I think the environment impact is probably negative.)

People who pay taxes win:

Since 1978 … renewable fuel production tax credits have drained the Treasury of almost $40 billion.

Although those credits just expired, people who own cars win:

… consumers have still been forced to dole out billions at the pump because of the renewable fuel standards.

People who eat food win:

About 40% of corn production is now used not for food or livestock feed, but for fuel. This has raised the price of corn, and a 2009 study by the Congressional Budget Office found that in some years ethanol has raised retail food prices by 5% to 10% for everything from corn flakes to ground beef.

The editorial concludes with a guess that Big Ethanol may fight the decision. Hmm. Let me think about that – – would crony capitalists fight for more money at the expense of everyone else?

You can count on it.

Leave a Reply

Your email address will not be published. Required fields are marked *