Burning food for fuel is a bad idea. It's even worse when taxpayers are forced to pay for such wrongheaded public policy every time they fill up their gas tanks.
Two recent developments underscore the foolishness of the federal government's misguided efforts to prop up ethanol to benefit agricultural interests at the expense of the public. First, the Environmental Protection Agency agreed to let the ethanol content of gasoline rise by half — from the current 10 percent to 15 percent — for use in cars made in 2007 and later. Now automakers and engine manufacturers are suing the EPA over concerns that drivers of older cars and owners of boats and lawn mowers could unknowingly fill up with E15 and damage their engines. Those engines were never designed to run on this ethanol mix, which burns hotter, corrodes parts and attracts water.
Second, as part of the tax legislation that extended the Bush-era tax cuts, the ethanol subsidy was continued for another year. That pays fuel blenders and refineries 45 cents a gallon to mix corn ethanol into gasoline. That's great for the corn industry, but it's bad for everyone else.
Subsidies for corn ethanol are a waste of tax dollars, and allowing E15 at the pump — despite labels supposedly limiting its use to newer cars — invites confusion and trouble. Corn-based ethanol has had plenty of time to prove itself as an alternative fuel. (Remember gasohol and the Carter administration?) While its production isn't as wasteful as it once was, it still makes no sense. And if it hasn't been able to wean itself from subsidies by now, it's time to end the boondoggle and look for effective alternatives. Even Al Gore, who once supported corn ethanol, has reversed his position.
These wrongheaded subsidies continue even as demand for gasoline drops (see chart). And starting with the 2012 model year, a carmaker's fleet will have to average 30.1 mpg, up from 27.5 — the first time manufacturers will have to hit a higher fuel economy target since 1990.
Ethanol could make sense as a renewable fuel source that can be kind to the environment. But for that theory to become reality, the ethanol needs to come from sources — cellulosic grasses are one possibility — that don't divert crops from the food chain and don't require so much tilling, fertilizer and fieldwork that the net energy gain is small. And engines would need to be designed to burn ethanol efficiently, not just tolerate it. Until that day, using an ethanol blend will continue to hurt fuel economy, as a gallon of ethanol has only 70 percent of the energy of a gallon of gasoline.
There is promising research on biofuels made from algae. It is one of many such projects that deserve attention and may merit more research dollars. But continuing to subsidize the use a foodstuff — corn — as the primary source for ethanol and then requiring its increased use in fuel to create an artificial market is terrible policy.
In an era where cars are becoming more efficient — and electric cars, plug-in hybrids and other biofuels hold increasing promise — ethanol subsidies should be abolished and tax dollars should be shifted to research that will lead to real energy independence.