A Tale of Two Ethanol Fuel Policies

by Carmel Roberts

May 25, 2011

Ethanol is not just the subject of debate in the United States.  Across the pond, European lawmakers are grappling with similar questions yet, in some instances, are coming to decidedly different conclusions.  So what gives?  Carmel Roberts offers some insight on key factors influencing American ethanol policy.

In the same way a person’s car says something about the owner’s personality, public policy speaks to a nation’s disposition.  While we have focused on the science behind the ethanol policy debate, the political factors that continue to drive the issue here in the U.S. are hard to ignore.

The Seeds of Discontent: Ethanol Fuels Unusual Political Alliances

This spring, American ethanol policy and how it is funded received a good deal of scrutiny by Congress.  First, Congress considered whether or not to defund the EPA’s implementation efforts for E15 blended gasoline but ultimately chose not to include the measure in the final budget compromise.  Most recently, a bi-partisan amendment was introduced in the U.S. Senate to eliminate the federal subsidies for ethanol and repeal the tariff imposed on the importation of ethanol from other countries.

Illustrating just how strange ethanol politics has become, this recent amendment came with a letter of support signed by Sierra Club and the petroleum refineries that benefit from the subsidies.

In support of her decision to co-sponsor the amendment, Senator Dianne Feinstein (D-CA) said, “Ethanol is the only industry that benefits from a triple crown of government intervention: its use is mandated by law; it is protected by tariffs; and companies are paid by the federal government to use it. Ethanol subsidies and tariffs sap our budget, they’re bad for the environment, and they increase our dependence on foreign oil.”

However, most insiders feel that this amendment will run into the same roadblocks as the previous attempts to defund the EPA’s implementation of E15.  Congress clearly is divided on the issue and, apparently, is not influenced by EU government reports describing the current consumer backlash over a proposed plan to move to from an E5 to an E10 ethanol blend standard for fuel.

Recently, the HVA met with several journalists from European and U.K. publications who were very interested in our EthaNO campaign and the research resources we have compiled on our Website. Apparently, in Europe, they are bracing for a fight over the E10 standard. In Germany, a recent consumer boycott of E10 lead the German government and fuel suppliers to indefinitely suspend offering E10 at the pump.

Ethanol Policy: You Reap What you Sow?

Many have speculated that the ethanol policy here in the U.S. is the triumph of politics over science and policy.  Recently, when the talk turned to ethanol on MSNBC—even Al Gore back-peddled.

“It is not good policy to have these massive subsidies for first generation ethanol,” he said.  ”I think it was a mistake.  The energy conversion ratios are at best very small.  One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president.”

As with any issue as large and significant as a national fuel policy, the mix between the policy arguments and political motivators is complex. Right or wrong, a person’s position on any issue is influenced by a complex political calculus.  Lawmakers have to consider if advancing policy will adversely impact not only the jobs in their state and the fuel system components in their constituents’ cars, but also their personal political aspirations. 

In Europe, where corn is not grown for ethanol production, economic incentives do not seem to play as heavily into the political calculus, and probably for good reason.  But that’s not reality in the U.S. where corn is to Iowa and the Midwest what the auto industry is to Michigan.

For now, we will continue to communicate our simple and straightforward position on ethanol to policy makers: any alternative fuel, including ethanol, should be fully and adequately tested on all vehicles and it should be sustainable without government subsidies and should be safe for all vehicles on the road.

Comments

  1. Melanie TC

    Keep up the good work!