Brett Healy: Time To End The Failed Ethanol Experiment

MacIver Perspective | January 9, 2017

By Brett Healy, MacIver Institute President

The following op-ed first appeared in the Wisconsin State Journal.

For more than a decade, we have heard half-baked justifications for continuing with the failed energy policy known as the Renewable Fuel Standard, only to find constant evidence that U.S. consumers, air quality and our national security are all better off without this program.

With renewed efforts underway in Washington to limit the continued damage that comes from mandating the use of corn ethanol and other biofuels in our nation’s gasoline supply, the debate endures, as seen in a recent State Journal editorial on the topic, “Biofuel still beneficial.”

It’s time for that debate, though — along with the lopsided debacle that RFS has become — to end. If we want any shot at making real clean air progress, spurring job creation and kick-starting the development of advanced biofuels, policymakers and elected leaders must take a more realistic view of how this policy failure is holding us back.

The federal government’s effort for the better part of 12 years to tip the scales, providing a guaranteed market for ethanol-blended gasoline, could possibly be described as a great experiment for a few — namely, corn farmers — but absolutely terrible for most.

The 2005 Renewable Fuel Standard may have been well-intentioned, but it quickly became a failure of epic proportions, harming businesses, consumers and the environment.

The State Journal editorial calls the ethanol mandate a “success” and claims ethanol-blended gasoline is cleaner than pure gasoline. But the University of Michigan’s Energy Institute revealed in a study that greenhouse gas emissions from corn ethanol reach as much as 70 percent higher than emissions from standard petroleum gasoline. A recent study by UW-Madison also points to the RFS as a bad idea, as the State Journal editorial mentioned, noting corn ethanol’s major emissions.

Independent research has shown us many times over that emissions from corn ethanol are detrimental to our water and terrain — from plowing the land, to harvesting and transporting the corn and, finally, to producing ethanol.

Despite the government’s meddling — picking certain well-connected special interest groups over American consumers, families and small businesses — Wisconsin voters are speaking out about this failed policy. Take, for example, Laura Timm, spokeswoman for Wauwatosa-based manufacturer Briggs & Stratton, who recently told the Journal-Sentinel that “some kind of reform or repeal is necessary” on ethanol.

Likewise, Dan Ariens of Brillion-based outdoor power equipment manufacturer Ariens Co., the American Motorcyclist Association, and ABATE of Wisconsin are all united in opposition to failed federal ethanol mandates.

And where the State Journal editorial board asserts that “domestic corn ethanol enhances national security by reducing dependence on foreign nations for energy,” we say that the revolution the United States has seen in domestic oil and natural gas production has done that much more effectively, with considerable speed. The shale revolution has not only made the RFS unnecessary, but the mandate is detrimental to our nation’s progress toward energy independence.

Read the full op-ed in the Wisconsin State Journal here.

  • Erocker

    With every environmental group against the corn ethanol mandate so now is the time to get rid of this horrible federal government mandate.

  • Sodakbull

    The president of a think tank that comes up with the statement that the shale revolution has made the RFS unnecessary needs to spend a little more time thinking rather than cashing checks from the petroleum industry. Check the price of oil lately. Its going up substantially in the past 6 months. In addition referencing the study from the Michigan energy institute and the UW Madison study shows obvious bias as those studies have received severe criticism from both industry and academia for their miscalculations.

    I am probably more conservative than most on here but dont lie to me in the name of conservatism. You loose credibility when you do and become no more than a glorified MSM lackey only of different persuasion.

  • jjs

    If the price of oil goes up, the price of ethanol goes up even more. Gas would be cheaper without ethanol in it.

    If ethanol was the magical bullet, you would just produce more ethanol and bring the price of oil back down. It can’t happen technically and if it could, food prices would go up even further and we would have massive inflation. Supply and demand. Without ethanol we would see an instant food price drop and a gas price drop. We are burning our food supply and not eating it. It’s making a few politicians and farmer rich is all it is doing now.

    Fracking has revolutionized the oil supply. You can turn fracking on and off, so when prices go up they stabilize because the oil supply can be increased by turning on more wells in a few hours. Oil is going up now because the world economy is heating up not because of big oil, most fracking rigs still are independent. Wells are coming on line and prices will stabilize and not shoot up over 80 a barrel, my opinion.

    Hence, OPEC can no longer control our country because of fracking. Without fracking and only ethanol they’d still own us along with our food supply. If OPEC stopped pumping we would either have to decide do we eat or drive. The reason the Middle east is bowing to our pressure, Russia is a mess economically, riots in Iran, Venezuela is crashing, etc… is not because of ethanol, it is because free markets are in control of the oil supply now through fracking, not ruthless dictators and sh!thole countries who counted on corrupt oil prices (at our expense) to keep their populations under their thumbs.

    Ethanol is only a political issue now and hinders our security and development as the article notes. It also inflates the cost of food which is not mentioned in the article.

  • Sodakbull

    Hello jjs
    You brought up a lot of things to address here but I will try. There is a much bigger picture happening in the oil, ethanol and ag sector than what most think

    First of all, there is no magic bullet when it comes to the energy needs of this country and especially when it comes to fueling our transportation sector. They all have trade offs in terms of utility, costs, environmental damage, human health, economic development and national security. Anyone who says different isn’t being truthful.

    I am by no means advocating to get rid of all oil and replace it with ethanol. But I am by no means advocating letting the petroleum industry have a lock on the market either, as that will lead to serious human health ramifications, environmental damage, increased energy costs, and will actually hinder our security and development as we still depend on a large share of our oil from overseas and we have to defend the international market for oil. The money that the dictators and despots earn from the petroleum industry still funds a large part of these international terrorist organizations. We are spending billions to counter it every year and loose hundreds of soldiers as well. How does that help our security and economic development?

    Ethanol does fit into our fuel supply in a variety of ways. It is the cheapest form of octane on the market and it is also the cleanest burning additive. It allows refiners to essentially get more gallons of cheaper lower octane gas from a barrel of crude and add the needed octane through cheaper ethanol. Without ethanol, they would use their aromatics which are more expensive and are dirtier burning leading to human health issues. Some people think they may be worse than the lead or MTBE that they used to put in our gas supply. Do a search of ethanol vs aromatics if you want to learn more.

    As far as the ethanol industry driving food costs up it is a total myth. The US consumer spends the least amount of their income on food than any other country in the world by quite a bit too. The farmer gets about 15% of the retail food dollar. The rest is processing marketing and transportation. The fact is that the price of food is much more dependent on the price of crude oil than the price of grain. Lets not be locked into one product in case of a sudden shock to that industry such as war in the middle east or a hurricane in the gulf of Mexico. Just look at the price of gasoline following the shut down of refiners in the gulf due to the hurricane this past year. Gas shot up ethanol didn’t. Lets have a system where depending on market conditions we can have one product substitute for another.

    The price of corn peaked after a record drought and has come down about 65% while the ethanol production has about doubled. That wouldn’t happen if it was the primary driver of corn prices. In addition, the ethanol industry produces over 45 million pounds of a high quality high protein feed that is helping to drastically reduce feed costs for the livestock industry. That means livestock producers are being incentivized to produce more meat and yet I still hear that ethanol is driving food prices up. Its almost like they dont know that the corn going to the ethanol plant isn’t the same corn that humans eat at their diner table.

    Here is a link that shows numerous studies done by multiple national and international government agencies and private institutions that all came to the same conclusion. The ethanol industry added very little to the cost of food and provided a stabilizing force for agriculture. In fact I believe that the ethanol is the very stabilizing force that would allow our ag sector to get away from farm programs and enable the federal government to stop subsidizing agriculture like they do now. I thought that is something that these conservative think tanks would want to do instead of being a puppet for big oil and the environmental working group.

    http://www.ncga.com/topics/ethanol/corn-ethanol-and-food-prices

  • jjs

    I’m an engineer who designs processes and builds factories. Solving technical issues on a daily bases using science is what I’ve been doing for the last 40 + years.

    You are an ethanol supporter and I assume you have a
    reason to lobby for it.

    I don’t have the time (although I have the knowledge and experience) to explain why you are wrong on 90% of what you state. The science does not support you.

    Good luck,

  • Sodakbull

    I hold engineers and the scientific community to a higher standard as they are supposed to deal in facts not just buy into a highly funded pr campaign to spread misinformation. The idea that ethanol is raising food prices of any significance isn’t supported by the data.
    I don’t lobby for ethanol. I live in rural America and am sick of the lies being pushed out by people who know nothing about agriculture or our food production system. I have researched this for a long time and I can back up my positions very well. I’m only trying to spread the truth.