Broken Biofuels Policy will Bust your BBQ

Weekly WastebasketBroken Biofuels Policy will Bust your BBQ

Energy & Natural Resources  | Quick Takes
Jun 30, 2017  | 5 min read

It’s officially summer! School’s out, the Fourth of July is upon us, and folks are firing up the backyard grill.

But not everyone is on vacation. Ethanol lobbyists are hard at work in Washington trying to push policymakers to put more corn ethanol into the already saturated marketplace.

One thing that shouldn’t end up on Congress’s summer to-do list is expanding subsidies for corn ethanol. Instead, policymakers should turn to the underlying problem – the Renewable Fuel Standard (RFS), a government mandate requiring increasing levels of biofuels to be blended with the U.S. fuel supply.

Corn ethanol, originally used as replacement for gasoline oxygenate additives like MTBE, was promised to be a bridge to next-generation biofuels when the RFS was greatly expanded in 2007. Policymakers intended for an increasing proportion of biofuels to be derived from non-food sources such as perennial grasses and wastes instead of food/feed crops. However, corn ethanol continues to be another bridge to nowhere. Nonpartisan experts expect the RFS to fail to meet its original goals of lower greenhouse gas emissions and greater U.S. energy independence.

U.S. corn ethanol consumption has reached a plateau, as Congress intended, but significant volumes of cellulosic and advanced biofuels are nowhere to be found despite lofty government mandates. The U.S. has, however, met its 15-billion-gallon mandate for corn ethanol. About 10 percent of the U.S. gasoline supply (by volume) is made up of ethanol, at least 95 percent of which is derived from corn. Since older vehicles, lawnmowers, and boat engines cannot use higher blends of ethanol (beyond 10 percent, or E10), the U.S. has hit the maximum amount of ethanol that can safely be used in the current fuel supply. Taxpayers have spent tens of billions of dollars getting the corn ethanol industry to this point. So you would think its lobbyists could afford a summer vacation.

Unfortunately for taxpayers, ethanol lobbyists are working overtime, attempting to find a home for huge piles of cheap corn (which is also subsidized). The corn ethanol industry is pushing for legislation that would expand the use of E15, gasoline blended with 15 percent ethanol. The problem is everyone from the Coast Guard to AAA has warned consumers to stay away from E15. A 2012 AAA surveyfound that only five percent of vehicles could use E15.

The corn ethanol industry has cooked up other ways to expand at taxpayer expense. Internationally, taxpayers subsidize trade missions to promote near-record levels of corn ethanol exports. Domestically, lobbyists secured taxpayer subsidies in 2011 for ethanol blender pumps, special gas pumps used to dispense fuel blends as high as E85. Even after Congress squashed these U.S. Department of Agriculture (USDA) subsidies in 2014, the next year, then-Secretary Tom Vilsack went around policymakers’ backs to find $100 million for blender pumps. We awarded him a Golden Fleece for putting special interests ahead of taxpayers. The corn lobby’s appetite for more government subsidies hasn’t stopped there. It also supports defying Congressional intent to open up the RFS’s “advanced biofuels” mandate to corn ethanol (which is currently prohibited). This would be yet another example of corn ethanol having its hand in programs and subsidies not originally intended for it.

Corn ethanol subsidies hit taxpayers in the pocketbook not only in direct subsidies but in higher fuel and food costs. From your lawnmower to your boat, costs to repair damages to small engines can also add up quickly. Not to mention greater water pollution and disruptions to corn markets when 40 percent of the U.S. corn crop is diverted to ethanol each year.

This summer, instead of bowing to special interests, lawmakers should give taxpayers a much-deserved break from the RFS and keep the corn for the BBQ.