Commentary: E15 for better or worse

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Last week, the U.S. Environmental Protection Agency (EPA) approved the first applications for making gasoline containing up to 15 percent ethanol – known as E15. For better or for worse, here we go again.

Ethanol proponents promptly hailed the EPA announcement saying that the United States is one step closer to being free from the whims of unstable Mideast oil-producing countries and farther down the road to energy independence. They also say that consumers are better off with more ethanol in their tanks.

What the proponents fail to mention is the potential contribution to U.S. energy independence offered by aggressive development of domestic oil projects, such as the Keystone pipeline, which could get us much farther down that road to energy independence. The U.S. ethanol industry need not worry about those issues, however. After all, they are protected by the 800-pound gorilla in the room known as the federal Renewable Fuel Standard (RFS).

To enable widespread use of E15, the Obama Administration has set a goal to help fuel station owners install 10,000 blender pumps over the next five years. Gas pumps dispensing E15 will be clearly labeled so consumers can make the “right choice” according to the EPA. But oh, by the way, they are not requiring the use or sale of E15. But just in case there is a rush to purchase E15 they do require that 13.2 billion gallons of ethanol be produced in 2012.

The rapidly increasing production of corn-based ethanol in the United States is viewed by many as a primary factor in escalating grain prices seen over the past five years. U.S. corn inventory is expected to be the smallest in 16 years by this summer, largely a result of ethanol production which now consumes around 5 billion bushels, or 40 percent, of U.S. corn. The RFS mandate is proving that disastrous results follow when government mandates are put into place and market forces are suspended.

For example, the poultry and livestock industries have to compete against the ethanol industry for the corn they feed to their animals yet there is no mandate for beef or pork consumption. It is no wonder beef and pork prices are also near record high prices.

The failed RFS mandate essentially says that fuel is more important to the country than food. Yet, even with the RFS mandate and all the federal support for ethanol production U.S. consumers continue to face near-record prices at the pump as well as at the grocery store check out.

It is essential that we pass a contingency plan which would suspend mandated ethanol production levels in the case of a short corn crop. Anything less would be disastrous for the nation’s livestock and poultry producers who are already paying double the price for corn they did five years ago.

It is also time to pick up the pace of cellulosic ethanol production instead of relying almost exclusively on corn. Meanwhile, put the RFS mandate on hold and allow the market to determine how much corn is used for fuel and how much is used for food.



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OH  |  April, 13, 2012 at 09:39 AM

That's a poor argument when you said that gas prices are at a near record with the ethanol. Prices very well could be much higher without the ethanol. BTW US Oil imports are down a million barrels a day from 2007. Gasoline imports are down 300,000 barrels/day. That's $36.9 billion less dollars leaving the country every year. Plus the increased US jobs created by ethanol.

colfax, ia  |  April, 16, 2012 at 09:30 AM

What if, what if, what if. The ethanol industry promised us if they mandated and subsidized their industry we would never see these kinds of gas prices. Now they tell us the same story as the President does. That if we hadn't done what he/we have done then things would be worse. That's as worthless as an argument as the President's.

NE  |  April, 13, 2012 at 09:54 AM

your bias shows .first cheap corn now cheap ethanol Smithfield and Cargill must love you.

NE  |  April, 13, 2012 at 09:54 AM

your bias shows .first cheap corn now cheap ethanol Smithfield and Cargill must love you.

David Pullen    
Duncansville, PA  |  April, 13, 2012 at 10:10 AM

E15 is a typical government program, the more you use the more inefficiency introduced into the system.

Batavia  |  April, 13, 2012 at 07:29 PM

The RFS mandate is not a failure. Ethanol has been a very successful replacement for MTBE as an oxygenate additive to gasoline. Would you rather more groundwater was polluted by using MTBE? Or maybe more pollution is your choice? It seems that dairyman did not mind a federal subsidy when it made cheap corn for them to buy. But now that it is not so cheap anymore it looks like the hedged dairy farms with debt only surpassed by the federal debt are not such a good idea anymore. Now that the corn growers have another market for their crop the cattle feeders want the government to bail them out. It is a good thing the author put his suggestion for more cellulosic ethanol at the end of the article. Otherwise I would have know it was all foolishness from the start. Not one drop of commercial cellulosic ethanol has been produced and I do not expect that to change anytime soon. A short look at the chemistry of cellulosic ethanol shows it is obviously a joke.

Colfax  |  April, 16, 2012 at 11:17 AM

The RFS was not a failure in the fact it achieved its goals. It mandated an industry into existence that would have never been as large and intrusive as it is today. The RFS is a detriment to the economy and another way communism is sold to the public as independence and the American way. Stalin would be thrilled with our 5 and 10 year plans, turning food into political vehicles, and replacing what the government has little control over (oil companies) with what they do have lots of control over (corn production).

Joe Dairyman    
New Mexico  |  April, 13, 2012 at 08:19 PM

If ethanol was so good why do we need a mandate? Why not let the market forces work? Ethanol mandate is a bad policy. The livestock industry can't take much more of this unfair mandate.

Ed & Emma    
MA  |  April, 13, 2012 at 10:17 PM

If our big dairies weren't infected with the expansion virus, our milk price should enable us to buy the corn or the fertilizer needed to grow it. The pundits that write magazines were calling on their readers to "gear up for exports", but the markets can only soak up so much product. We need a mandate requiring all American households to spend at least 15% of their food budget on dairy....When that level is reached it could be increased to 20%....or we could implement some supply management that rewards those who hold the line on production.

Texas  |  April, 14, 2012 at 08:28 AM

Another irrational and unwise by the EPA. But would we ever expect any from our government. Agriculture like everything and everyone else has NO chance at success with such unreasonable inadequate organizations as the EPA . Thanks for the information. Keep up the good work.

April, 16, 2012 at 05:10 PM

So what is the indirect oil consumption of producing replacement parts and whole cars damaged by e15 gas? Does that offset the savings of direct gas import for the tank? And if there is an increase, then is there a double dipping effect of gas consumption by supposed reduction of gas imports?

Mark Mettler    
Minnesota  |  April, 17, 2012 at 01:05 PM

The same car makers that produce cars here produce cars in Brazil that run on 85% ethanol. They are called Flex Fuel vehicles. If cars produced by Ford, GM etc. can run on 85% ethanol in Brazil, for god sakes they can easily run cars on 15% ethanol here!!

colfax  |  April, 17, 2012 at 09:22 AM

TO Ken Corn production is highly regulated by the US government whether it be the insurance program and the farm bill. If you have ever farmed, you would know how many agencies you have to seek approval of yearly to do your business. All are under the USDA and then some outside like the EPA and local authorities all telling how much, how little, and how to farm. Smog is worse under Ethanol, MTBE is a water polluter but at the same time it was brought to us by the EPA, yes the EPA gave us MTBE because they required an oxygenate. Smoking something yes, its the cigar given to the holder of truth, justice and the American way. No commie ethanol in this tank.

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