Consumers already know that the federal government’s ethanol mandate is bad news, but the latest EPA proposal works out the gory details for the years ahead.
Thanks to the 2007 Energy Independence and Security Act of 2007, increasing amounts of renewable fuels have to be added to the gasoline supply. Currently, the mandated amounts are 11 billion gallons for 2009, met mostly by corn based ethanol. The targets rise to 36 billion by 2022 and will have to include other as-yet not commercially viable alternatives like cellulosic ethanol. EPA’s proposal provides more specifics as to how this mandate will be met.
Of course, the only reason these alternatives need to be mandated in the first place is because they are too expensive to compete otherwise. In 2008, even as gasoline was reaching record prices, the ethanol mandate made them even more expensive. In addition, the diversion of corn from food to fuel use raised the price not only of corn itself but related food items such as corn fed meat and dairy. That’s right – the government’s ethanol policy meant that it cost more to drive to the supermarket and cost us more once there. The pain will only get worse as the mandated amounts are ratcheted up.
Increased ethanol is also backfiring environmentally – even many environmental groups have turned against it. EPA’s proposal documents concerns that ethanol could actually increase greenhouse gas emissions relative to gasoline and sets out requirements to avoid this counterproductive result. Of course, doing so would make an already costly alternative fuel even more expensive.