The Energy Information Agency (EIA) admits in its 2010 Annual Energy Outlook that, under present law, ethanol use in 2022 is projected to be almost a third less than the 35 million gallons-equivalent per year mandated by Congress way back in 2007.
What to do? The ethanol industry, with the blessing of Congress and the Obama Administration, is lobbying the EPA to mandate increased ethanol usage. This would be accomplished by increasing the allowable proportion of ethanol in gasoline from 10% to 15% (E10 to E15). In addition, ethanol lobbyists are pushing the administration for fleet mandates on automakers, to require a higher percentage of flex fuel vehicles (FFVs) capable of running on ethanol blends of up to 85% (E85).
The 70+ year experiment in central planning that was the Soviet Union ended in failure. Why can't our political class learn from history?
By granting lucrative tax credits to finance the entree of Big Corn into the motor fuel business during times of high gasoline prices, Washington definitely has some skin in the game.
Conservatives hate ethanol because it represents an intrusion of Big Government into the marketplace. Tons of dough are being spent to try to develop an alternative fuel that represents a very poor alternative - perhaps even a net energy loss.
Liberals and Greens (at least the honest ones) quietly admit their disdain for corn based ethanol. Tax credits are "corporate welfare" for ADM and Cargill. You can't name a crop that is more depleting of the soil. Corn requires heavy fertilization, which in turn runs off, polluting the Mississippi River Basin and the Gulf of Mexico. The ethanol production subsidy makes it more difficult to develop competing technologies.
The marketplace is not clamoring for more ethanol. To engineers and mechanics, it is underpowered and corrosive, thus hard on pipelines and rotating equipment. Last but not least is the impact that a distorted world price of corn has on the developing world's food supply.
No, the only parties who are unabashed ethanol lovers are:
- Big Corn
- Corn Farmers & Corn States (especially Iowa)
- Politicians (Congress & Iowa Caucus Presidential candidates)
The only thing efficient about corn ethanol is the Beltway process of turning taxpayer dollars into reliable votes.
Cross-posted at VladEnBlog.