Ethanol producers and politics, looking for trouble

The ethanol mandate is a perfect example of Groucho Marx’s observation that “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.” For decades, the ethanol lobby has received billions of dollars in response to policies to address alleged problems. First, air quality, then energy security, and more recently, climate change.

{mosads}All of these problems were exaggerated and none required an ethanol fix, or subsidy, to be precise. And now, even though the Environmental Protection Agency (EPA) has increased the volume of ethanol that must be used in transportation fuels, the Renewable Fuels Association (RFA), the trade association for U.S. corn ethanol producers, is having a tantrum over the EPA’s decision to only mandate 14.5 billion gallons of corn ethanol in 2016 U.S. transportation fuels, rather than the full 15 billion gallons allowed by law.

The EPA’s 2016 corn-ethanol volume requirement is the largest ever. But like all who are motivated by greed, ethanol producers never get enough. The RFA is bellowing its discontent and blaming someone else for its loss. It’s Big Oil’s fault, the RFA says, claiming the oil industry is thwarting “consumer choice at the pump” by recommending that the EPA limit the amount of ethanol in gasoline to 9.7 percent of U.S. gasoline consumed.

There are scientific reasons for limiting the concentration of ethanol in gasoline to no higher than 10 percent (E10). As the Coordinating Research Council, a joint oil/automobile industry testing program, has found, gasoline blends comprising more than 10 percent ethanol have damaged vehicle engines.

Ethanol has an affinity for water, which can lead to the corrosion of engine components. In tests conducted on late-model vehicles, valve damage, fuel leaks and emission increases have been documented. In marine engines, including some of the most widely used outboard motors, tests conducted with ethanol blends have confirmed overheating and engine damage. Some marinas refuse to sell fuels containing any ethanol to their customers, citing performance and safety concerns.

Despite these test results, the EPA is allowing the sale of E15, a blend of up to 15 percent ethanol, for model-year 2001 and newer vehicles. Auto manufacturers have responded by saying they will void warranties for damage caused by E15 fuel. They do not want to be held responsible for damage or motorist safety problems.

Many consumers do not want that risk either and have rejected ethanol-blended fuels altogether. They prefer straight gasoline, even though it might cost slightly more. From 2012 to 2014, demand for straight gasoline nearly doubled from 3.4 percent to 7 percent of total gasoline demand. Among those who buy straight gasoline are farmers — including corn farmers — who do not want to put ethanol in their older tractors.

And there’s another problem that until recently has been ignored by the environmentally friendly Obama administration: The production of corn ethanol emits far more greenhouse gases (GHGs) into the air than the EPA admits. Analyses by the Environmental Working Group and the National Academy of Sciences have shown corn ethanol’s life-cycle GHG emissions are higher than gasoline’s. The EWG reports that the Keystone XL pipeline, which was rejected by the president for being too environmentally dirty, would have been cleaner than the continuation of the ethanol mandate.

In mid-October, the EPA Inspector General’s office launched an investigation into the alleged benefits of biofuels. In a letter, it pledged to determine whether “the EPA is complying with reporting requirements” aimed at protecting the environment and public health.

The RFA, however, is more interested in keeping the money flowing. Under the Renewable Fuel Standard (RFS), which is the enabling legislation for the corn ethanol mandate, refiners must blend huge volumes of corn ethanol into gasoline every year. Without this government-imposed artificial market, refiners could return to the pre-RFS days in which much smaller volumes of ethanol were used as an octane-enhancer in gasoline.

Politics, not science, is the basis for the ethanol mandate. Before the Clean Air Amendments of 1990, Congress was provided research results demonstrating that emission standards could be met without increased use of ethanol. To end RFA’s caterwauling and addiction to government largess, Congress should use a tough love, one-step program and simply repeal the RFS.

O’Keefe is president of Solutions Consulting and Van Ryan is a retired communications professional.