ethanol

Hillary Clinton and Donald Trump don’t agree on much, but they see eye-to-eye on the Renewable Fuel Standard. Too bad they’re both wrong.

Despite being a politically favored source of energy, Ethanol is not the right solution to our problems.

The Renewable Fuel Standard (RFS)—also known as the ethanol mandate—was passed by Congress in 2005 and expanded in 2007. Regardless of market conditions, it required ever-increasing quantities of biofuel be blended into the nation’s gasoline supply—though the Environmental Protection Agency (EPA) does have the flexibility to make some adjustments based on conditions, such as availability and infrastructure.

Too many presidential candidates court corporate cash by promoting ethanol.

The Department of Energy announced state revenue from severance taxes dropped as the price of crude oil falls below $30 per bushel. The following charts show tax revenue for 6 states.

The purpose of any economic exchange is to better one’s position, whether a person buys or sells something for money or barters for something else. This is the essence of free market capitalism, where all economic transactions are voluntary because they are of mutual benefit. They are all “win-win” situations in the minds of the participants.

Quite a few GOP 2016 presidential candidates have responded “I am not a scientist” which may come back to haunt them in the future. This GOP response is unsatisfactory because political candidates should be aware of important issues. In particular about climate change; where the Democrat Party’s response is overturning our entire energy supply system by abandoning our abundant, inexpensive, and geographically distributed fossil fuels of coal, oil, and natural gas. The U. S. is the most blessed nation on the planet with abundant fossil fuels.

Abengoa, a Spanish renewable energy company, is on the brink of failure. Few in the United States might care except for the fact the Obama administration showered Abengoa with more than $2.9 billion in federal grants and loan guarantees: If Abengoa goes belly up, taxpayers will be on the hook for a bankruptcy that makes Solyndra’s look small by comparison.

Donny Kendal and John Nothdurft host the third episode of the “In The Tank”, a weekly podcast that will feature interviews, debates, roundtable discussions, and stories and light hearted segments on a variety of topics on the latest news. The show will be available for download as a podcast every Friday.

It’s common for people to misunderstand or misconstrue the difference between acknowledging the failure of the ethanol mandate to deliver on its promises of materially increasing energy independence or lowering prices for consumers, and being “anti-ethanol.” It’s entirely possible to see advantages of using ethanol without believing it should be mandated, just as it is possible to see the advantages of having a health insurance policy without supporting Obamacare. All mandates have unintended consequences.

Congress concocted the mandates over fears that US gasoline demand would rise forever and keep the United States dependent on foreign oil, as America’s supposedly limited reserves were depleted. The mandates currently require that we blend 15 billion gallons of ethanol with gasoline every year, and produce over a billion gallons of biodiesel. They hammer us consumers every time we fill our tanks.

Nearly 10 years have passed since the federal government imposed a national mandate requiring gasoline be blended with ethanol. At that time, President George W. Bush claimed the United States was addicted to oil and that biofuels, especially ethanol produced from corn, offered an important way to bring down gasoline prices while weaning the nation off of foreign sources of oil and supporting economic development in rural America.

Early in the new millennium, oil prices began to rise and natural gas prices shot up. Doomsayers lacking an understanding of history and economics popped up, as they always do, to proclaim the end of cheap oil was nigh. “Peak oil” pundits ruled the airwaves and editorial pages.