Bradley: In Iowa, ethanol is a litmus test
Iowa is traditionally the first stop for every presidential hopeful who is plotting a path to the White House. In early March, nearly every potential Republican candidate traveled to the Agricultural Summit in Des Moines where they were pressured by state politicians and lobbyists to support corn-based ethanol.
As Iowa’s Republican Gov. Branstad cautioned, “Don’t mess with the RFS.”
The RFS (Renewable Fuel Standard) mandate, passed by Congress in 2005 and updated in 2007, requires refiners to blend billions of gallons of corn ethanol and advanced cellulosic ethanol into U.S. motor fuels annually. The goal was to reduce dependence on foreign oil and create incentives for the domestic ethanol industry.
Instead, the RFS became an unruly and poorly managed behemoth with a slew of distortions and unintended consequences. Special interests took over.
Consider just some of the renewable fuel standard’s harmful effects.
First, it has turned food into fuel. In 2000 before the ethanol mandate, 90 percent of the U.S. corn crop was used to feed people and livestock in both developed and undeveloped countries, and only 5 percent was used for ethanol.
By 2013, 40 percent of America’s corn was used to produce ethanol, 45 percent went toward animal feed, and only 15 percent was used for food and beverages.
Ethanol appears to hurt the environment more than help it. A report from the United Nations Intergovernmental Panel on Climate Change says consuming biofuels emits 30–90 percent less greenhouse gas than gasoline or diesel fuel, but due to “land use change,” such as toppling trees to grow more corn, biofuels “can lead to greater total emissions than when using petroleum products.”
Ethanol also has damaged or destroyed vehicle, marine, and lawn equipment engines. Ethanol has an affinity for water and can corrode plastic, rubber and metal parts in the fuel system. Engine and vehicle manufacturers warn they will void warranties for the use of fuel containing more than 10 percent ethanol.
Yet the Environmental Protection Agency, which administers the RFS, has approved a partial waiver allowing the sale of E15, a blend containing up to 15 percent ethanol.
Of course, ethanol isn’t even needed today. The RFS was passed at a time when gasoline demand was rising rapidly and the United States was dependent on other countries for most of its crude oil supplies. Today, however, America is awash in domestic oil due to advanced drilling technologies that are producing oil from U.S. shale formations.
As long as the RFS is the law of the land, the EPA will be duty-bound to shoe-horn ethanol and other biofuels into the nation’s fuel mix.
So far the EPA’s wrong-headed resolve has led to the disastrous Renewable Identification Number (RIN) program which sharply increased costs for refiners, and imposed millions of dollars in fines against refiners for failing to blend cellulosic ethanol into motor fuel although EPA’s own data showed no commercial quantities even existed.
The EPA has the authority to reduce the ethanol blending requirements but has refused to exercise that option. Now there is a bipartisan bill in Congress that would end the corn ethanol mandate completely. Co-sponsor Sen. Pat Toomey, R-Pennsylvania, says the bill is aimed at stopping “the government from using corporate welfare to shower money” on the ethanol industry and sending “the bill to the general public.”
In Corn-is-King Iowa, support for ethanol is a litmus test for potential presidential candidates. The RFS is sacrosanct.
Voters who go to the polls in 2016, however, will be less interested in satisfying ethanol lobbyists than promoting energy affordability and reliability.
When it comes to the RFS, corny capitalism must go.
Robert L. Bradley Jr. is CEO of the Institute for Energy Research.