The Bush administration is forcing California to add ethanol to the state's gasoline, a requirement that Gov. Gray Davis says will raise gas prices and cause shortages nationwide. While the Environmental Protection Agency justifies ethanol-enhanced gasoline as necessary to reduce ozone pollution, Davis says it will actually keep California from having cleaner air.
Davis may have a point.
The federal Clean Air Act requires densely populated areas in 11 states to add an "oxygenate" to gasoline, and there are only two: a petroleum-derived substance called MTBE, which is the most widely used, and ethanol. California currently uses MTBE, but it is being phased out in 2002 because it pollutes groundwater.
That leaves ethanol, which is made from corn. About 6 percent of the nation's corn crop is fermented and distilled into ethyl alcohol, the ingredient that gives whiskey its kick, and marketed as ethanol. While ethanol alone can be used as a fuel, it is twice as expensive (without government subsidies) and less efficient than gasoline.
Corn farming is propped up by federal price supports, and ethanol production is given a tax exemption that has cost the government more than $10-billion in revenues. Even after the largesse, ethanol is still more expensive than gasoline. Also, ethanol is difficult to transport and must be mixed close to where it is produced, mostly in the Midwest. In California, ethanol is expected to boost gas prices up to 3 cents per gallon, while it decreases mileage by about 3 percent.
Davis warns that ethanol shortages could push California gas prices up by 50 cents per gallon. While that is probably an exaggeration, California will need 600-million gallons of ethanol a year, a challenge to ethanol producers. And if there are shortages, it will affect gas supplies and prices in many cities and states outside California. (No part of Florida is required to use an ethanol additive.)
At least California will have cleaner air, federal officials say. Maybe not.
While the ethanol additive does reduce carbon dioxide emissions, it may cause more nitrogen oxide to be released in exhaust. Because both substances contribute to ground-level ozone pollution (smog), ethanol's impact on California air quality is questionable.
Davis asked for a waiver from the ethanol requirement, and he was backed up by oil companies, which say they can exceed clean air standards by reformulating their gasoline rather than adding ethanol. The Bush administration denied the waiver.
California Sen. Dianne Feinstein has filed a bill that would allow a governor to waive the ethanol requirement as long as the state still complies with the Clean Air Act. That's a reasonable compromise that would lower gas costs and improve supplies, but it has little chance of success.
Here is why. Many Republican and Democratic officials, especially those from farming states, are beholden to the farm industry and ethanol producers. A major Republican contributor, Archer Daniels Midland, is the largest maker of ethanol. And new Senate Majority Leader Tom Daschle, a South Dakota Democrat, introduced the amendment to the Clear Air Act that requires the ethanol additive.
Ethanol also figures into another irresponsible program. U.S. automakers build more than 1-million cars a year with engines that can burn ethanol or gasoline, and in return a federal program gives them a big break on meeting overall mileage standards. Intended to relieve our dependence on foreign oil, the program actually makes it worse. Virtually none of the cars uses ethanol because fewer than 1 in 1,000 service stations offers it. The program actually causes more gas to be consumed because it allows more gas guzzlers on the road.
So ethanol is not a solution to California's air pollution problems or to a more independent gasoline supply. Politicians are merely propping up the ethanol industry. And all Americans could end up paying the price.