Ethanol is a failure

By Mark Perry.

"Only in the skewed reality of an industry-funded special interest lobbying group could a government-mandated policy forcing an artificial market for corn ethanol on the American public be passed off as a conservative, free market policy. And yet, corn ethanol’s newest cheerleader – a lobbying group called Americans for Energy Security and Innovation -- is attempting to make the case that this failed mandate is a silver bullet for achieving energy security, improving our environment, and saving consumers pain at the pump. It’s a flawed position that isn’t supported by the scientific and economic facts.

If there’s anything we know about Washington lobbying groups (as well as politicians), it’s that just because they say something, it doesn’t mean it’s true. And in the case of corn ethanol lobbyists, that couldn’t be more spot-on. Here’s the reality that the ethanol lobby refuses to acknowledge – America is more energy secure today than at any time since the early 1970s thanks to American free-market ingenuity and revolutionary made-in-the-USA technologies that have unlocked our country’s abundant shale resources. 

Yet after a decade of nearly every imaginable form of government corporate welfare – including an artificially guaranteed market regardless of what consumers want as well as billions of dollars in taxpayer subsidies – it’s clear that corn ethanol has failed by virtually every measure. 

Americans for Energy Security and Innovation spokesman Jim Talent is right on one issue in his recent column (“Obama’s Carbon Emission Hypocrisy”), writing that “the President [Obama] is focusing on dubious solutions” to address climate change. What is conveniently left out, however, is that doubling-down on corn ethanol is itself a dubious solution, causing great harm to our environment and American consumers. 

But don’t take my word for it. Former vice president and environmentalist Al Gore has said the corn ethanol mandate “was not good policy” and that this policy “was a mistake.” Scores of environmental advocates – such as the Environmental Working Group, Sierra Club, and Friends of the Earth – echo Gore’s concerns and remain staunchly opposed to corn ethanol because of its significantly negative environmental impacts.

Why? Because study after study continues to clearly demonstrate, in no uncertain terms, that corn ethanol’s total climate impacts are     actually making our environment worse, not better. In fact, a new study from University of Tennessee experts concludes that the Renewable Fuel Standards (RFS) deep if not singular over-reliance on corn ethanol is significantly increasing greenhouse gas emissions. Similar studies from experts at the University of Michigan and University of Minnesota have analyzed corn ethanol’s total emissions impact, concluding that corn ethanol is 70 to 100 percent worse for the environment than gasoline. 

What’s more, the EPA’s Inspector General recently launched an investigation into the full climate impacts of the RFS, including a review of corn ethanol’s complete emissions profile. And in a Congress that can’t agree on much these days, there’s considerable bipartisan agreement to repeal the failed corn ethanol mandate.

The timing for meaningful reform couldn’t be better, as the EPA is getting ready to announce new corn ethanol blending levels that could force even more government-mandated and subsidized ethanol into a saturated market that doesn’t want it. In fact, only six percent of the cars on the road today, according to the AAA, can safely handle ethanol-blended fuel with levels higher than the 10 percent blend that’s most widely available.

Further, the ethanol lobby’s claim that corn ethanol has reduced gas prices is flawed. Put the silly politics aside and look exclusively at the chemistry. Ethanol is less energy dense, providing consumers with 27 percent lower fuel economy compared to traditional gasoline. That means consumers have to burn a lot more ethanol-based fuel to drive the same distance, unnecessarily eating away at increasingly tight family budgets.

While ethanol’s Washington lobbyists continue to clamor for government-guaranteed markets, mandates, and handouts to artificially prop up biofuels, America has surpassed Saudi Arabia and Russia to become the world’s No. 1 oil and natural gas producer. And we didn’t achieve that remarkable energy outcome because the government picked winners and losers.

Here’s a suggestion for President Obama as he continues to weave together his environmental legacy: Listen carefully to environmentalist and fellow Democrat Al Gore (albeit briefly) and put a nail in the coffin of the broken corn ethanol mandate. For once, he’s got it right.

Perry is a resident scholar at The American Enterprise Institute and a professor of economics at the Flint campus of The University of Michigan."