The premise of using ethanol as a fuel-additive is not a new one. The latest wave saw the Environmental Protection Agency requirement of 15% ethanol added to gasoline. Concerns are continuing to build over the impacts of the practice ranging from environmental, vehicle, and agricultural damage. The EPA’s allowance of ethanol-based credits, called RINs (Renewable Identification Numbers), was created as a way to purchase one’s way into non-compliance, akin to the carbon credit market. This created an artificial market and changed the landscape of agriculture in America, having effects reaching across the globe.
According to Forbes.com:
In 2000, over 90% of the U.S. corn crop went to feed people and livestock, many in undeveloped countries, with less than 5% used to produce ethanol. In 2013, however, 40% went to produce ethanol, 45% was used to feed livestock, and only 15% was used for food and beverage (AgMRC).
The United States will use over 130 billion gallons of gasoline this year, and over 50 billion gallons of diesel. On average, one bushel of corn can be used to produce just under three gallons of ethanol. If all of the present production of corn in the U.S. were converted into ethanol, it would only displace 25% of that 130 billion.
But it would completely disrupt food supplies, livestock feed, and many poor economies in the Western Hemisphere because the U.S. produces 40% of the world’s corn. Seventy percent of all corn imports worldwide come from the U.S. Simply implementing mandatory vehicle fuel efficiencies of 40 mpg would accomplish much more, much faster, with no collateral damage.
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The EPA has now scaled back its recommendations for ethanol blending. The environmental benefits have been called into question. The backlash for ethanol as a fuel-additive has been building. Ethanol requirements created a non-compliance market (RINs) and altered the agriculture industry, energy policy, automakers, gas producers and consumers, as well as food prices. It created an environment that pitted the environmental concerns of crude oils against the availability of land allocated to grow food, rather than fuel alternatives.
Lawmakers on both sides of the aisle are starting to ramp up opposition to ethanol policies or step back their previous enthusiasm for it. States are getting involved, as well. In 2013, Florida passed a law repealing the ethanol requirement of the Florida Renewable Fuel Standard Act, “to remove the requirement that all gasoline offered for sale in this state include a percentage of ethanol, subject to specified exemptions…”. Connecticut just introduced HB05242, which would require the Department of Energy and Environmental Protection “to study the feasibility of eliminating the use of ethanol in gasoline.” An Oregon bill sponsored by Republicans, HB2373, would go further by ending the requirement of the state’s Department of Agriculture to keep tabs on the production of ethanol fuel. Mainly, it “removes requirement that retail dealer, nonretail dealer or wholesale dealer of gasoline sell only gasoline blended with specified percentage of ethanol.”
The ethanol industry functioning as a fuel-additive may be viewed similarly to the rooftop solar panel industry. It’s been overinflated by the government through various means and whose benefits are not what was previously touted. In the new GOP majority of congress, it will be interesting to see if the EPA will be required to remove requirements, not just scale them back.
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