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Economy, Regs, & Taxes

EPA Proposes More Corn for Fuel, Not Food

Get ready to pump more destructive ethanol into your tank.

Paul Albaugh · Jun. 2, 2015

Compared to this time last year, Americans are paying much less at the gas pump. Enjoy it while you can, though, because gas prices are about to rise. The expected price increase isn’t due to chaos in the Middle East or a shortage of fossil fuels. No, it’s due to the Environmental Protection Agency and its newly released proposal to increase ethanol production. By the way, do you like your food bill? Get ready, because that’s about to increase too.

The EPA’s proposed three-year ethanol mandate will increase the amount of biofuel mixed into the gasoline supply. This may sound great to supporters of so-called renewable energy, but it’s actually doubling down on a terrible idea.

Why? Well, there are several problems with requiring more ethanol in America’s fuel.

First, several gasoline refiners have warned that the proposal “moves more quickly than the market can support.” In 2007, when Congress expanded the Renewable Fuel Standard, only half of all gasoline contained 10% ethanol. Right now, nearly all of the gasoline produced and used in the U.S. contains 10% ethanol. However, the decrease in demand for gasoline due to more fuel-efficient vehicles means a corresponding decrease in demand for ethanol. The EPA would rather ignore reality and aims to increase ethanol production anyway.

According to The Hill, the EPA “set its overdue 2014 requirements at the actual level of production — 15.93 billion gallons of biofuel — increasing the total to 16.3 billion gallons this year and 17.4 billion gallons in 2016. The statutory requirement for 2016 is 22.25 billion gallons.” Under the EPA’s new proposal, about 4.7 billion gallons of renewable fuel are expected to come from advanced forms of biofuel such as cellulosic ethanol derived from plant mass material, despite its slower-than-expected development. The remainder will be corn-based ethanol, which brings us to problem number two: increased food costs.

The mandate drives up food prices because corn is a staple food and is also used by livestock for feed. Has anyone noticed the skyrocketing price of beef over the last several years? Furthermore, if more corn is used for ethanol, then there is less food for people in the world who are starving. Quite the double standard for progressives and environmentalists who rage about the human population dying from climate change. No doubt hungry people would love to have some corn to eat, but, nah, let’s burn it for fuel so we can save mankind in the future.

Last year, Mark Alexander noted some staggering statistics that are worth repeating: More than 90% of our nation’s corn crop went toward feeding people and livestock in the year 2000, with less than 5% of the crop going toward ethanol. In 2013, however, a whopping 40% went toward ethanol. To illustrate this grossly inefficient use of our natural resources, the amount of grain required to fill a 25-gallon automotive fuel tank with ethanol is enough grain to feed one person for an entire year.

The third problem with the EPA proposal is that ethanol itself is more costly for drivers and consumers. Despite auto engines being built to better handle ethanol’s corrosive effects, ethanol gasoline causes significant and costly mechanical problems for small boat engines and yard equipment. But auto engines are about to be impacted in the near future, too. How so? It turns out that Barack Obama is set to pledge $100 million to expand the use of ethanol blender pumps to allow drivers to mix more ethanol into their gasoline. Sure, it may work for new flex fuel vehicles, but not so well for older cars. Some people won’t discover that until it’s too late.

This is a pathetic pledge and ultimately pathetic policy, funded by the American taxpayer. People will have to pay a little more in taxes to pay for these pumps, pay a little more for the ethanol that comes out of the pumps and then pay more to fix what the ethanol destroys.

The final problem with the EPA’s proposal — and perhaps one of the primary reasons for it — is that there are subsidy recipients who stand to profit handsomely. In other words, the government is picking winners. While we’re not opposed to people and businesses making profits, we are adamantly opposed to the central planners who by regulations and fiats force products into the market. Some farmers and ecofascists stand to benefit, but when free market principles are cast aside America loses.

In the coming months, we’ll be watching to see where the Republican presidential candidates stand on this issue. So far, most of them are singing praises of the ethanol mandate. It seems they’re more concerned about getting votes in Iowa and bowing to King Corn than they are for standing for free market principles. Note to Republican presidential candidates: Try not to get on board with the ethanol mandate, because it’s ultimately part of Obama’s climate change agenda.

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