USAToday Editorial: End the ethanol mandate: Our view

Source: By The Editorial Board, USA Today • Posted: Sunday, March 15, 2015

Ignore the political supplicants to Iowa.

There they were, the Republican presidential aspirants, touting their conservative bona fides and lining up behind an important principle. One by one, they vowed to support Big Government as it imposed its will on small businesses, debased free enterprise, and burdened working Americans with hidden taxes.

The scene was the Iowa Ag Summit earlier this week, where, thanks to the state’s first-in-the nation caucuses, the field of presumptive candidates came to declare fealty to the so-called Renewable Fuel Standard. The RFS is a mandate that Americans put billions of gallons of corn-based ethanol into their gas tanks each year even though they don’t want it and it makes no practical sense.

Apart from Sen. Ted Cruz of Texas, they all supported the mandate, including Gov. Scott Walker of Wisconsin, the latest conservative darling, who arrived at his pro-ethanol position thanks to a 180 degree reverse back flip that would have impressed a platform diver.

The parade of supplicants suggests that ending the mandate, which dates to a 2005 law, will not happen any time soon.

Nevertheless, there is some reason for modest optimism. Several bills to phase out ethanol have significant support. The original rationale for the mandate, energy independence, is less of an issue now. And a number of recent events — the surge in domestic energy production, the fall in oil prices and the advent of more efficient cars — have conspired to make the mandate’s demands laughable.

The RFS, which requires retailers to sell a 10% ethanol blend or pay into a convoluted subsidy system, imposes major burdens on consumers. A gallon of ethanol is more expensive than a gallon of gasoline ($2.43 vs. $1.73 wholesale) and gets only about two-thirds the mileage.

This forces motorists to pay $10 billion a year more at the pump, according to Robert Bryce of the Manhattan Institute. That’s more than a quarter of the $38 billion raised by the federal gasoline tax. Then consumers get hit a second time at the supermarket, where rising corn prices drive up the cost of everything from beef to cereal.

Meanwhile, the argument that energy security demands a home-grown, “renewable” fuel is no longer viable thanks to new oil and gas drilling techniques and advances in wind and solar. In fact, the ethanol makers who once wrapped themselves in the flag are now shipping their product overseas.

Another rational — ethanol’s status as a “clean” fuel — was always a farce. While a gallon of ethanol emits fewer greenhouse gases than a gallon of gasoline, it is far dirtier after accounting for the energy used to till and fertilize the land used to produce it.

If these weren’t enough reasons to revisit the mandate, consider this: Fuel use has been dropping thanks to more efficient cars and other factors. That has made it hard to unload mandated ethanol quotas without going above a 10% blend, something Detroit says its cars can’t handle.

The solution is obvious: Just end the mandate — notwithstanding the kowtowing of politicians traipsing through Iowa.