Heartland Institute Experts React to EPA’s Proposal to Increase Ethanol in Gasoline
The Environmental Protection Agency on Wednesday proposed a new standard that would increase the amount of ethanol in the country’s gasoline supply by 700 million gallons by next year. The requirement would increase the ethanol in gasoline to 10.44 percent, a rate higher than the “blend wall” – a level oil companies suggest is the upper limit before car engines are damaged by the ethanol.
The following statements from environment and energy policy experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Director of Communications Jim Lakely at [email protected] and 312/377-4000.
“It’s hard for anyone to argue that the renewable fuel standard (RFS) has been a good policy, and the Environmental Protection Agency’s decision to increase the amount of ethanol in the nation’s fuel supply means this train wreck of a policy will continue for at least another year.
“Owners of small engines like lawn mowers, snow blowers, and boats are hurt by ethanol mandates because ethanol is hard on these engines. Environmentalists don’t like the ethanol mandate because farmers have sought to take advantage of high grain prices by clearing more land for farming.
“Even the farmers who once benefitted from skyrocketing corn prices because nearly 40 percent of the nation’s corn crop was diverted to fuel are now hurting because corn production increased to meet demand. Today, corn prices are below the cost of production in many areas of the country. High crop prices caused the prices of land, machinery, seeds, and fertilizer to increase as well – and many farmers took on large amounts of debt during the ‘ethanol boom’ only to be faced with dim prospects to repay it.
“Maybe the RFS made more sense in 2006 when it seemed the United States was running out of oil and natural gas, but now that hydraulic fracturing has made the U.S. the largest producer of natural gas in the world and nearly doubled oil production since 2008, mandating we use more ethanol than is necessary to make gasoline burn cleaner (anywhere from 4 to 8 percent ethanol by volume acts as an oxygenate for more complete combustion) doesn’t make any sense.”
“Proponents of RFS have two main talking points: That RFS will reduce carbon dioxide emissions, and will reduce American dependence on foreign oil. The latter reason for RFS has been negated by the boom in oil and natural gas production caused by hydraulic fracturing and horizontal drilling, and the former was never reasonable to begin with. Biofuel production requires a great deal of land, disrupting the carbon-storing potential of the soil, and at least partly offsetting emissions reductions that may have been achieved by substituting ethanol for regular gasoline.
“Here In Illinois, for example, the Center for Regulatory Solutions estimates the RFS has led to $5 billion in unnecessarily high fuel costs for state residents, will depress workers’ wages by $7 billion by 2024, has set farmers back an extra $164 million in feed costs, and has produced an extra 22,000 tons of soil erosion.
“The RFS imposes higher costs on consumers, has no real environmental benefit, and hurts the economy. Instead of expanding it, EPA should kill it entirely.”
“This is a relatively small increase from last year and still five billion gallons below the amount specified by the law. It is basically a case of the EPA trying to satisfy both the politics and the law simultaneously.
“Recognizing that ethanol from both corn and ‘switchgrass’ are far behind in production, the EPA used an exemption allowed in the law to set the amount below the mandated amount. Still political pressure from corn state legislators mounted, virtually guaranteeing an increase this year. Corn state legislators can go back home and say they forced the EPA to up the amount of ethanol required – while the EPA, to the extent political pressure allowed, kept the amount required within the realm of the possible.
“This foolish yearly game, combined with the fact that ethanol has done nothing to help the environment, the economy, and the nation’s energy independence – all promises made when the ethanol mandate was put in place – show the mandate should be ended. Fracking, not the ethanol mandate, is the source of our lower fuel prices, lower emissions and greater energy independence. And it was driven by the market, not government interventions.”
The Heartland Institute is a 32-year-old national nonprofit organization headquartered in Arlington Heights, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.