Nelson: Ethanol mandate hurts consumers in many ways
08/29/2014 12:00 AM
08/28/2014 5:16 PM
What would it mean to family budgets if the government required motorists to fill up their tanks with a fuel that gets fewer miles per gallon than gasoline?
Well, that’s already happening, and it’s an expensive and unnecessary way to reduce our nation’s reliance on imported oil. Although there has been a dramatic increase in domestic production of oil and natural gas due to the shale revolution, billions of dollars are still being spent producing ethanol, largely from corn, in the hope it someday will help America achieve energy independence.
Ethanol is a form of alcohol indistinguishable from moonshinem, created by fermenting and distilling the starches from corn and other crops. The ethanol subsidy costs U.S. taxpayers about $6 billion a year.
Ethanol’s use is required under the 2007 renewable-fuel standard. Congress approved the standard without full discussion and debate, without considering the heavy cost to consumers or the environmental consequences of using huge amounts of fertilizer to boost corn production. An area in the Gulf of Mexico extending for hundreds of square miles at the mouth of the Mississippi River is considered a dead zone due to toxic pollution from fertilizer runoff due to Midwest corn production.
Ethanol currently consumes more than 40 percent of the nation’s corn crop, diverting corn from the food supply, while doing nothing to temper fuel prices.
The ethanol rule means higher prices at the pump. A blend called E15 — which is 15 percent ethanol —provides 27 percent lower fuel economy than gasoline, costing about 70 cents a gallon more than gasoline on an energy-equivalent basis.
The 2007 law contemplated that the advanced biofuels industry would have taken off by now. But that has not happened due to economic and technological barriers. Today scarcely any domestically produced ethanol is made from wood chips, switch-grass or other cellulosic sources. Consequently, almost all of the ethanol in the United States is corn-based, which means that hundreds of food products — including cereal, ice cream, pork and beef — cost more.
Given the full repercussions of the ethanol mandate, it’s time — well, past time — for Congress to repeal the renewable-fuel requirement. It would be doing consumers a big favor.
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