My Voice: The real truths about ethanol

Written by Jeff Lautt, CEO, POET, Argus Leader  • Posted: Monday, January 28, 2013

The biofuels industry is beleaguered by misinformation and smear tactics, and the most recent “pro/con” series in a recent Sunday Argus Leader was a sad continuation of that. Two competing articles both ripping grain-based ethanol hardly constitute fair or balanced coverage.

Ethanol is the most successful renewable fuel in history, dropping our oil imports, providing good jobs in South Dakota and other rural states, boosting farm income, cleaning our environment and helping engines become more efficient. But the truth is spun and respun every year, led primarily by the oil industry and all it can buy: ad campaigns, P.R. firms, lobbying power and sponsored “studies” creating the impression that ethanol is a subsidized, low-quality fuel that’s taking food off the table.

That impression couldn’t be further from the truth, and I’d like to set the record straight on some claims that continuously come up around ethanol.

1. Ethanol is an over-subsidized industry.

False. Sunday’s headline, “Should Congress end ethanol subsidies?” is an example of baseless allegations thrown at the biofuels industry. It’s plain wrong.

Corn ethanol does not get federal subsidies and hasn’t for more than a year. The ethanol tax credit expired at the end of 2011, as did the tariff. A more fitting pro/con debate would be “Should Congress end oil subsidies?” Because the billions of dollars in oil subsidies and tax credits, which have been written into our federal tax code, still are intact after a century despite the oil industry setting earnings records year after year on the backs of American drivers.

2. Ethanol, especially E15, isn’t safe for my vehicle.

False. Safe use of ethanol is well established. Henry Ford even designed his first automobile to run on ethanol. In Brazil today, cars run on 20 percent ethanol blends, and there are plans for Brazil to go up to 25 percent later this year.

Ethanol boosts octane and adds horsepower while burning cleaner. More than 90 percent of gasoline sold today contains ethanol. And after E15 (15 percent ethanol blend) went through the most exhaustive testing ever for a fuel component, the EPA ruled it safe for all cars 2001 model year and newer (older vehicles were not tested). If you think your mileage drops significantly when using ethanol, blame oil companies that produce cheap gasoline and use ethanol to meet octane requirements.

3. If ethanol could compete, it wouldn’t need a mandate.

False. Ethanol is the most competitive fuel component on the market today. In 2012, wholesale ethanol was a $.55-per-gallon discount on average to wholesale gasoline. After a century of subsidies and government support, the oil industry has control of our fueling infrastructure from refineries to pipelines to gas stations. Without a mandate, they would ignore other fuels even if they’d save consumers money.

4. Ethanol increases food prices.

False. Oil prices are a much larger component of the cost of food than raw materials from the farm. A truckload of cornflakes has about $450 worth of corn in it. But the average transportation cost to get that corn to the store shelf comes to about $1,000. For years, food prices have risen and fallen along with oil prices.

5. Ethanol uses 40 percent of the U.S. corn crop.

False. While ethanol plants grind about 40 percent of the U.S. corn crop, they only use the starch. The protein, oil and micronutrients are put back into the feed market as distillers grains, with three times the protein per ton of corn. Net use of corn for ethanol is actually 17 percent in the U.S. and less than 3 percent globally. If there wasn’t an ethanol market for this corn, do you think farmers would grow it? No. You could say the ethanol industry actually increases the amount of corn available for food.

Big oil and big food use the philosophy of Soviet leader Vladimir Lenin: “A lie told often enough becomes the truth.” It’s time the American public woke up to these lies and questioned the industries behind them.

The real facts are that the American ethanol industry uses America’s two greatest natural resources — agriculture and innovation — to produce a high-octane, clean-burning fuel that saves consume