While "The money-grubbing mendacity of the ethanol lobby" has been linked to Alpha Centauri and back, it doesn't make the concise case for discounting ethanol as a solution to the USA's petroleum woes. The people coming here through searches are probably looking for that, so here it is as a public service.
There are plenty of reasons that we can't replace - or even meaningfully displace - petroleum gasoline with domestic ethanol. Here are a few of them, with supporting info:
I hear your question: "If that's true, why is the conventional wisdom so wrong?" That deserves an answer. Several answers, actually, because there are a lot of different groups with different interests converging to the same point of emphasis.
- The farm lobby wants concentration on ethanol because it wants grain prices to stay high. Farmers have been extremely successful, to the point that they have produced more grain than US consumers and even farm animals can eat. This condition of surplus makes it a buyer's market; the price falls below the cost of production and farmers are threatened with bankruptcy. We used to deal with this problem with production set-asides to manage supply, but one period of shortage caused price spikes and a consumer backlash which threw that out the window.
For farmers, the 30-billion-odd gallon figure is a good thing. The market for liquid motor fuel is one that grain farmers can never saturate (absent a huge change in the vehicle fleet). But conditions of perpetual shortage and high prices which are good for farmers are very bad for consumers.
- The auto makers want ethanol because the law gives them huge benefits for doing almost nothing. Take GM's "Live Green, Go Yellow" campaign. This takes advantage of the "E85 loophole"; maybe $150 for a flex-fuel sensor and some ECU software, and a monster gas-guzzler like a Suburban or Durango gets close to a 50% CAFE-rating boost. (Here's another link.) The loophole assumes that flex-fuel vehicles will use E85 half the time, but seriously: do you visit any stations with E85 pumps? Have you even seen an E85 pump? Do you think many people would actually buy E85 knowing that they'd pay a mileage penalty between 1/4 and 1/3?
This is also why some carmakers are playing with hydrogen fuel for conventional engines instead of fuel cells: it's cheap to demonstrate, and it makes them look like they're doing something.
- The oil industry has a love/hate relationship with ethanol. The blenders hate it because its high vapor pressure requires special refining for the gasoline fraction, and its finicky tendency to separate if it gets damp requires special (and expensive) shipping. But the business as a whole loves it; it's not a competitive threat, it makes the public feel that Something Is Being Done, and they get to enjoy high prices while people vacillate about whether or not to ditch liquid fuels completely and go with something like electricity.
There are some voices on the other side. For instance, the CEO of AutoNation has called for the automakers to produce vehicles which can run at least partly on electricity. This would cost in the short term, but be much better for the health of the industry and the nation in the long term. Think about energy security: if you depend on corn or switchgrass for your fuel, a drought or period of grass fires (like Kansas through Texas this year) could jeopardize the nation's fuel supply as badly as a bunch of hurricanes in the Gulf. But if your "extra" fuel is electricity, you can make it from wind, sun, coal or even splitting atoms. The supply of electricity is much more secure than the supply of gasoline or ethanol.
And that's why YOU, dear voter, should be skeptical about ethanol or even opposed to it. There are benefits from it, but those benefits aren't for you.
Labels: ethanol, ethanol lobby, open letter