Latest posts by Isaac Orr (see all)
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I would like to thank Crain’s Chicago Business for the opportunity to respond to the article published on September 10th: “Is U.S. commitment to renewable fuels waning?” Frankly, the article was either poorly researched or intellectually dishonest to an incredible degree. Contrary to the author’s claims, the Renewable Fuels Standard (RFS) has been a failure in almost every respect. Rather than mandating more ethanol be used, we should realize ethanol is a corncob pipedream, and do away with RFS, also known as the ethanol mandate, once and for all.
The author cites a mechanical failure at an oil refinery as a reason why ethanol is better for our credit cards, but this type of shortsightedness ignores the larger reality Americans are saving an average $15 to $25 every single time they visit the gas station because gasoline prices are more than $1 lower than they were a year ago. Over the Labor Day weekend, travelers enjoyed the lowest gas prices for that holiday since 2004. This has almost nothing to do with ethanol and almost everything to do with hydraulic fracturing, also known as “fracking.”
In fact, ethanol is actually harder on your wallet than gasoline because ethanol contains 33 percent less energy than pure gasoline, which means it requires more fuel to get from Point A to Point B and is ultimately more expensive than regular gasoline as a result.
For example, if gasoline costs $1.90 a gallon and ethanol costs $1.57, the latter sounds like a bargain, but consumers have to spend $2.09 per gallon [$1.57x.333= $.52 ($.52+ $1.57 = $2.09)] to drive the same number of miles because of ethanol’s lower energy content. Ethanol is no bargain.
It is true oil imports have fallen by one-third since 2005, but again, this is because of fracking, not ethanol. According to the Energy Information Administration, the United States consumes about 19 million barrels of petroleum products per day, including gasoline, diesel fuel, and biofuels. In 2014, the United States used about 340 million barrels of biofuels, which means biofuels provided only about 18 days’ worth of fuel.
Fracking has increased U.S. oil production to 9.2 million barrels per day, more than an 80 increase percent since 2008. This technology, which made the United States the largest oil producer in the world in 2014, is vastly more important in reducing our need to import oil from countries such as Saudi Arabia and Venezuela than ethanol will ever be.
The author claims the ethanol mandate has reduced carbon emissions by 39.6 billion metric tons, but these claims are shaky too, because his number does not take into account that high corn prices gave farmers an incentive to convert pastureland and wetlands into cropland, which releases into the atmosphere vast amounts of carbon dioxide that was once trapped in the soil, creating serious doubts about ethanol’s supposed environmental benefits.
Finally, we cannot blend more ethanol into our gasoline because most cars are not equipped to handle gasoline blends composed of more than 10 percent ethanol, as higher concentrations of ethanol cause engine damage. This phenomenon is commonly referred to as the “blend wall,” and it makes adding more ethanol to the nation’s gasoline unrealistic.
Ethanol has some value, and the market understands this. It’s a valuable oxygenate, and it is the most affordable way to reduce carbon monoxide emissions from cars, thereby reducing smog. Some ethanol will be blended into gasoline even without a mandate for these reasons, but if ethanol is such a great product as the author of the September 10 article claims, it can compete on the open market like everything else.
The author is entirely wrong, however, to claim ethanol is more efficient and more affordable than other fuels. The RFS ethanol mandate is both unnecessary and harmful and should be ended immediately.