October 11, 2013

Regulatory Commissars: Enforcing the Ethanol Mandate

Big Government is pressuring Big Oil over Big Corn.

On the heels of federal subsidies and legislation designed to force a commodity into a market with little appetite for it, ethanol may be getting yet another assist. Senators Charles Grassley (R-IA) and Amy Klobuchar (D-MN) recently sent a letter to the Federal Trade Commission requesting investigation of the oil industry for “anticompetitive practices aimed at blocking market access for renewable fuels.” In other words, having failed to create demand with special treatment for ethanol, they now want Big Brother to harass oil companies forced to blend it with their product.

This goes back to the 2007 congressional mandate that 36 billion gallons of ethanol must contaminate the nation’s gas supply by 2022. With a growing gasoline supply, this might not have been problematic, but demand for gas hasn’t grown because of the EPA’s mileage demands and better technology from car manufacturers. And since gasoline with more than 10% ethanol wreaks havoc on engines not built to handle its corrosive effects, refiners have found themselves stuck between reality and the mandate. Unbothered by the former, the pro-ethanol lobby claims the oil industry is “blocking the introduction of cheaper, cleaner, and renewable alternatives.”

Meanwhile, even one Democrat has conceded the mandate’s failure, calling the standard a “flop” that’s caused both “environmental … [and] economic detriment to many sectors of the economy.” The White House, however, continues to vow loyalty to the ethanol lobby. But then again, that’s not surprising for an administration that doesn’t let facts cloud its judgment.

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