Posted by: Jerry Garrett | August 5, 2012

Why Doesn’t EPA Suspend Renewable-Fuel Standard?

A corny idea. (

Why doesn’t the Environmental Protection Agency suspend the renewable-fuel standards that require ethanol made from corn to be added to our gasoline? That is something that could immediately help lessen the impact of the Great Drought of 2012, which is expected to significantly drive up food costs.

An op-ed piece last week in The New York Times by two respected scientists point out the standard was “unwise” to begin with. That’s charitable; the standards were nutty, and a gift from the second Bush administration to politically connected farmers, ethanol producers and the corn lobby. So while the federal government essentially subsidizes the whole business, the ethanol industry is making a fortune – making the worst possible motor vehicle fuel.

Only about 15 percent of America’s corn crop goes toward domestic food and beverage production anymore. The rest is either exported, fed to livestock or – some 40 percent of it nowadays – diverted to ethanol production, the op-ed writers noted.

The current drought is said to be the worst since at least 1988; nearly 60 percent of the continental U.S. is affected. But the effects of this drought, the scientists argue, are being magnified by “misguided energy policies” like the ethanol mandate.

Prices for corn futures  have risen about 60 percent in the past six weeks, and are likely to continue to rise. Prices for other grains, including wheat and soybeans, rise in lockstep with corn, it seems. Food price hikes will inevitably follow; the only question is “how much?”

Federal renewable-fuel standards require the blending of 13.2 billion gallons of corn ethanol with gasoline this year. This will require 4.7 billion bushels of corn – or 40 percent of this year’s crop, the scientists wrote.

Funny. Sort of. (

Ethanol made from corn not only takes food off American dinner tables, the fuel made from corn is about the worst possible propellant for internal combustion engines.

Ethanol doesn’t make us any less dependent on fossil fuels. By most calculations (except those of the industry itself) it takes far more energy to produce corn ethanol than it yields. Other crops such as sugar yield more energy, at a lower cost.

Diluting gasoline with corn ethanol by five or ten percent does not lower the price of gasoline significantly; adding ethanol “actually raises the price of blended fuel because it is more expensive to transport and handle than gasoline,” the scientists pointed out.

Diluting gasoline with corn ethanol by more than ten percent may harm engines that are not set up specifically to run on it. (The EPA rather foolishly has recently adopted a new rule that allows the industry to do just that. Beware: If you use it, it may void your vehicle’s warranty!)

The government claims use of corn ethanol, compared to gasoline, reduces greenhouse gases by 19 percent. But the scientific community disputes it. Burning it in your car does not lower carbon dioxide production.  Racers use it because it can boost horsepower – but with a big penalty in fuel economy.

Ethanol yields about 30 percent less energy per gallon than gasoline, so – at the same time the EPA is adopting standards requiring cars to get much improved mileage – the very same EPA is encouraging greater use of a fuel that gets much worse m.p.g.

The scientists suggest the E.P.A. should waive the renewable-fuel standards for this year and next. Why?  “The combination of the drought and American ethanol policy will lead in many parts of the world to widespread inflation, more hunger, less food security, slower economic growth and political instability, especially in poor countries,” they write.

Sounds like a recipe for disaster, if no action is taken to relieve the situation. Would there be any losers in that scenario?

Where it’s going? (

Absolutely, and here is the reason the EPA will likely do nothing: The ethanol industry and corn farmers make a fortune insuring corn is in short supply. Wheat and soybeans farmers likewise make a bundle because prices for their crops also go up when corn prices rise.

And since it is an election year in America, don’t expect any candidate for a national or statewide office to try and reign in the ethanol industry or the corn lobby; those guys contribute millions to politicians who vote the “right way” on ethanol policy.

Jerry Garrett

August 5, 2012

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: