Opinion: Environmental Protection Agency proposing reasonable cut for ethanol

Source: Editoral, Milwaukee Journal Sentinel • Posted: Wednesday, January 22, 2014

Ethanol producers and corn farmers in Wisconsin are unhappy with Gov. Scott Walker because he hasn’t jumped on the Midwestern bandwagon opposing a federal proposal to cut the fuel additive requirement in gasoline. The U.S. Environmental Protection Agency has proposed cutting by 3 billion gallons, about 18%, the amount of ethanol in the U.S. fuel supply this year.

But Walker is for the most part a careful politician; he knows that what helps corn farmers and the nine ethanol plants in the state has hurt dairy and other livestock farmers and has the potential for harming the state’s small-engine industry. He has to balance those interests, and he said he made a campaign pledge to not weigh in on the issue.

And in this case, Walker is right not to weigh in. The EPA proposal is entirely reasonable, despite what other Midwestern governors and politicians are arguing.

It’s the first cut the EPA has proposed since the Renewable Fuels Standard was enacted in 2007; most of the gasoline sold in the United States today is a 10% ethanol blend. The idea behind the mandate was that it would reduce U.S. reliance on oil imports and be better for the environment — not to mention that it would help growers of corn, a major crop in the Midwest, including Wisconsin.

But the picture has changed since 2007. Domestic production, more fuel-efficient vehicles and fewer miles traveled have done far more than ethanol to reduce the reliance on oil imports and will continue to do so.

Ethanol is more expensive to produce than gasoline, and while it does cut greenhouse gas emissions at the tailpipe, in some cases the production of ethanol takes more energy to produce than is saved, raising overall emissions, as was noted in a Bloomberg Business Week blog two weeks ago by Charles Kenny.

And there’s the effect on corn as a food supply. Livestock farmers certainly have felt that in the feed they give their dairy cows, cattle and pigs.

“The part played by ethanol mandates in the global food price spikes of the last few years is debated,” Kenny writes. “But it’s worth noting that as the U.S. corn ethanol mandate climbed from 4 billion gallons in 2006 to more than 12 billion by 2011, corn prices more than doubled. And rising food prices have a particularly large effect on poor people, who spend a much larger percentage of the small incomes they do have on food….In addition to their impact on poverty, the mandates have proven an awful way to help the planet. To produce ethanol you have to farm corn using fertilizers and tractors, then transport the crop and process it into fuel. That all takes energy. And in some cases the land used for farming had been forest that was burned down to cultivate biofuel crops.”

At the very least, those concerns raise serious issues about the supposed benefits of ethanol, a fuel additive that, it should be remembered, has been helped by a very generous package of government mandates, tax credits and tariffs.

And there’s the concern raised by automakers and small-engine makers, who argue that a blend greater than 10% ethanol could result in problems such as premature engine wear, fuel line issues and lower fuel mileage. If the drop in demand for gasoline continues and the standard remains unchanged, growth in ethanol use would have to come from higher blends ranging from 15% to 85%, the EPA says.

Faced with those issues, the EPA is doing the right thing by paring the mandate. And the best solution might be to end the mandate altogether, as legislation introduced by Democratic Sen. Diane Feinstein of California and Republican Sen. Tom Coburn of Oklahoma would do.