Just who benefits from ethanol?
January 21, 2008

The ethanol compromise
by Missouri Rep. Ed Emery (R-126 including the counties of
Barton, Dade, Jasper and Polk)

Compromise is but the sacrifice of one right or good in the hope of retaining another-too often ending in the loss of both. --Tryon Edwards

Because of the makeup of my House District, I drive extensively, mostly at highway speeds. My car has a mileage computer, and over the last few months I have noticed a marked decrease in gas mileage-down from around 31 mpg to just over 28 mpg (approximately 10%). I discovered that most gas stations had already switched to a 10% ethanol mix in anticipation of Missouri's "ethanol standard," a compromise that seems to benefit everyone but the consumer.

Compromise is a part of life. A righteous compromise does not sacrifice principle, and benefits all parties. It may be impossible to benefit all equally, but all parties should gain and should agree to the balance achieved. Both information and transparency are essential to effective compromise! Where either is absent, some gain at the expense of others. Historically, government mandates do not represent good compromise; they violate market forces, pick winners and losers, and frustrate technological progress-all bad for the consumer.

A serious concern I have over Missouri's ethanol policy and the ethanol debate is what I perceive as a lack of both analysis and transparency. Two promises associated with ethanol are energy independence and reduced pollution. These are not "givens" as some would contend. For example, as early as 1997, DOE's Argonne National Laboratory determined that "[w]hile the use of ethanol as an automobile fuel additive improves air quality by reducing hydrocarbon and carbon monoxide emissions; it also increases the release of certain other pollutants..."

As recently as 2002, the EPA was reported to having said that factories converting corn into ethanol were releasing carbon monoxide, methanol and some carcinogens at levels many times greater than they predicted. Technology improves, and the ethanol industry is working to reduce negative impacts, but progress is impossible without transparency.

The foreign import claim is more nebulous. Current foreign oil imports stand at 171 billion gallons annually. Ethanol contributes 5.5 billion gallons and may go to 12 billion over time (less than 10% of imports). Refining doubles the impact to 20% (2 gallons of oil per gallon of gasoline), leaving annual oil imports at 137 billion gallons, hardly energy independence. The rest of the story is reflected in the anecdote about my gas mileage. If my experience is typical, then there is no reduction in imports because I am burning exactly the same amount of gas to go the same number of miles. Taking ethanol transportation and farm fuel consumption, and an energy yield of only about 138% (simplistically 1.3 gallon yield per 1.0 gallon consumed), the picture could be significantly worse.

If we want to continue to subsidize ethanol at $.50 per gallon (tax credits) and manipulate the marketplace, which ultimately punishes the consumer, then let's at least be honest about the costs and the benefits. The man paying the bill should know what he is buying and what he is paying. The worst deception is when we deceive ourselves.

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Just who benefits from ethanol?capp292202008-01-21 15:20:57