The folly of the ethanol mandate

University of Georgia Professor Emeritus Harold Brown writes of “The Ethanol Scramble” for the Georgia Public Policy Foundation. An excerpt:

The mandate for ethanol use was met or exceeded every year until 2010 when the mandate and consumption were just under 13 billion gallons. Consumption has levelled off since then, probably because it has saturated the market of 10 percent ethanol in gasoline (E10) that most stations carry.

The mandates do not end there. The law specifies that 36 billion gallons of renewable fuel be used by 2022. The most logical mechanism is a higher percentage of ethanol in gasoline blends (E85) and flex-fuel vehicles, which can run either on gasoline or a blend of fuels.

But the EPA is in a bind because of market forces. Although 15 million flex-fuel vehicles had been sold by 2012 (98 percent of all alternative-fuel vehicles), E85 now makes up less than one-tenth of 1 percent of motor fuel and the Department of Energy estimates that in 2020 it will still make up only 1.2 percent. …

Locker Room readers will recall that the mandate has to be filled despite the acute lack of demand, and the E15 is an extremely dangerous, corrosive element to most engines. So what is happening is that barrels upon barrels upon barrels of unused ethanol are sitting around never to be used — and that’s with a production mandate of 15 billion gallons. In five years, the mandate will more than double to 36 billion gallons.

Meanwhile:

40 percent of all U.S. corn [is being diverted] towards ethanol production. This massive market reallocation in such a short time has led to drastic price increases in all corn-based goods, from cereals to ethanol itself. … [T]here are also ethical (“social justice”) concerns surrounding ethanol mandates. For example, tortilla prices in Guatemala have doubled due to decreased supply of corn. Land that was once used to feed people is now diverted to ethanol creation, not enough food is being produced, and locals are going hungry.

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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