Biofuel Mandates - A Farce EPA Can No Longer Ignore

Apr 30 2014, 9:18pm CDT | by

Biofuels – including ethanol produced from corn in the United States – have taken a real beating over the last few weeks, and for good reason.  They are not competitive in the marketplace, requiring massive subsidies and mandates from a broke federal government to even exist, they drive up the price of all kinds of food at the grocery story, drive up the cost of gasoline at the pump, provide no environmental benefit over traditional petroleum-based fuels, and  cause harm to all manner of combustion engines.

Other than that, they’re just great.

The production of cellulosic biofuels- those made from non-edible parts of plants and wood waste – has almost completely collapsed over the last few years.  This has forced the EPA to finally acknowledge reality and dramatically cut the volumetric mandates it makes on the refining industry to blend this stuff with real gasoline.  The mandate for 2013 started out at 1.75 billion gallons, and the refining industry would have been fined if it did not use that much in its collective operations. The pesky little problem with that was the fact that the U.S. biofuels industry only produced 810,000 gallons during the year.

Rather than just sit back and take it as they had done in prior years when fined for not using enough of a largely non-existent fuel, the refiners collectively made enough noise in protest to convince the EPA to retroactively cut the 2013 mandate to 6 million gallons.  Still absurd in the context of the actual supply, but the bureaucrats at the EPA can never bring themselves to admit they are completely wrong about anything.

This year’s target mandate is 17 million gallons.  Todd Woody, writing in The Atlantic, reports that In the first quarter of this year, the biofuels industry managed to spit out a paltry 75,000 gallons of production.  This farce that benefits literally no one must come to an end.

As Forbes contributor James Conca reported in April, Corn ethanol has had an equally bad few weeks, largely thanks to the recent release of several international reports that indicate the fuel, which EPA has forced refiners to blend for ostensible environmental benefits, simply has no such benefits at all.  The UN’s International Panel on Climate Change issued two working group reports in March that contained the following passges:

“Biofuels have direct, fuel‐cycle GHG emissions that are typically 30–90% lower than those for gasoline or diesel fuels. However, since for some biofuels indirect emissions—including from land use change—can lead to greater total emissions than when using petroleum products, policy support needs to be considered on a case by case basis”

“Increasing bioenergy crop cultivation poses risks to ecosystems and biodiversity

The International Institute for Sustainable Development also admitted earlier this year that replacing petroleum fuels with ethanol produces essentially no benefit.  Their report estimated it is almost 100 times more efficient and far less costly to raise CAFE standards and increase vehicle emissions requirements than it is to continue blending ethanol into gasoline.

The problem the government faces is the problem that arises whenever any mandate or subsidy program is demonstrated to be wrong-headed and ineffective, as almost all of them ultimately are: how to cure the addiction without destroying the patient?   The ethanol and biofuels mandates have created an addiction in the farming and business community, created an artificial marketplace that is unsustainable, and encouraged farmers to convert millions of acres of land that is more suitable to farming rice, cotton, wheat and other crops to corn in order to take advantage of the programs.  The process of winding these addictive programs down almost requires a 12 step program.

How big has the distortion in the real marketplace been?  According to the Agricultural Marketing Resource Center, between 2000 and 2013, the percentage of the U.S. corn crop used to feed people and livestock fell from 90% to 60%.  In the same period of time, the percentage used to produce ethanol rose from 5% to 40%.

Conca sums up the human implications of that transition in very compelling terms:

In 2014, the U.S. will use almost 5 billion bushels of corn to produce over 13 billion gallons of ethanol fuel. The grain required to fill a 25-gallon gas tank with ethanol can feed one person for a year, so the amount of corn used to make that 13 billion gallons of ethanol will not feed the almost 500 million people it was feeding in 2000. This is the entire population of the Western Hemisphere outside of the United States.

It is clear these mandates that serve no benefit and cause so much distortion in the marketplace must end.  The problem for the government are:

  • First, the EPA must be willing to finally admit it is wrong, that the soviet-style command and control policies they have forced on the refining industry, the farming community, and the public all these years in fact produce no benefit to the country or the environment.  In other words, the first step to recovering from an addiction is to admit you have a problem.
  • Then, the government has an obligation to try to find a way to end these programs in a manner that does not completely devastate the tens of thousands of American farmers, biofuels manufacturers and others in the supply chain they have encouraged to become hooked on the programs in the first place.

Don’t hold your breath waiting for a good outcome there.  The EPA has never been very good at things like self-examination and making amends to those they have harmed.

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Mali confirms two new Ebola cases
United Nations, Nov 26 (IANS) Mali has confirmed two new cases of Ebola, bringing to total number of cases in the West African nation to eight, days ahead of the opening of a new UN Ebola response office.
 
 
Merkel warns of recession in Europe
Berlin, Nov 26 (IANS) German Chancellor Angela Merkel Tuesday warned that Europe could slide back into recession, media reported.
 
 
India, Nepal ink nine deals; Modi inaugurates trauma centre, bus service (Roundup)
Kathmandu, Nov 25 (IANS) Nepal's happiness "gives us joy", Prime Minister Narendra Modi said here Tuesday on his second visit to the Himalayan country in 100 days as both sides inked nine agreements, further cementing their close ties.
 
 
India, Nepal ink 10 deals; Modi inaugurates trauma centre, bus service (Intro Roundup)
Kathmandu, Nov 25 (IANS) Nepal's happiness "gives us joy", Prime Minister Narendra Modi said here Tuesday on his second visit to the Himalayan country in 100 days as both sides inked 10 agreements, including on $1 billion assistance to Nepal.
 
 
 

Latest from the Network

'Star Wars' spin off to focus on bounty hunters?
Los Angeles, Nov 26 (IANS) The much-awaited "Star Wars" spin-off movie will reportedly focus on bounty hunters. Director Gareth Edwards's untitled "Star Wars" spin-off movie will focus on a group of bounty hunters,...
Read more on Celebrity Balla
 
Lawrence credits Hemsworth for 'toughening her up'
Los Angeles, Nov 26 (IANS) Actress Jennifer Lawrence has credited Liam Hemsworth, her co-star in the film "The Hunger Games: Mockingjay - Part 1", for "toughening her up". The 24-year-old said in an interview to Nylon...
Read more on Celebrity Balla
 
French FM says, Iran nuclear talks 'rather positive'
Paris, Nov 26 (IANS) French Foreign Minister Laurent Fabius said Tuesday that he thought the tone of the Iran nuclear talks in Vienna was "rather positive." Speaking to radio France Inter Tuesday morning, Fabius...
Read more on Politics Balla
 
Former Portuguese PM remanded in custody
Lisbon, Nov 26 (IANS/EFE) Former Portuguese prime minister Jose Socrates has been remanded in custody on suspicion of corruption, tax fraud and money laundering, media reported Tuesday. The former Socialist Party...
Read more on Politics Balla
 
Obama's approval rating falls to 39 percent
Washington, Nov 26 (IANS/EFE) President Barack Obama's approval rating fell to 39 percent, according to a survey released Tuesday. Voters were very divided about the executive action measures he has taken to suspend...
Read more on Politics Balla
 
Lindsay Lohan not invited for dad's wedding
Los Angeles, Nov 26 (IANS) Actress Lindsay Lohan was reportedly not invited to her father's wedding. The 28-year-old, whose father Michael Lohan tied the knot with long-term girlfriend Kate Major Oct 30, was absent...
Read more on Celebrity Balla
 
Ariana Grande 'shocked and upset' by Bette Midler criticism
Ariana Grande was upset by Bette Midler's recent criticism of her. The 21-year-old singer was left feeling shocked and offended by the remarks of the entertainment icon. A source told gossip website TMZ that the sexy...
Read more on Celebrity Balla
 
Kendall Jenner denies being bullied by models
Kendall Jenner has never been bullied by catwalk models. The 19-year-old beauty is one of the hottest names in the fashion world at the moment, having recently been named the new face of beauty brand Estee Lauder - and...
Read more on Celebrity Balla
 
Angelina Jolie says Bob Geldof is a 'wonderful man'
Angelina Jolie thinks Bob Geldof is a ''wonderful, wonderful man''. The former Boomtown Rats star has been criticised for his part in the Band Aid 30 single, which is considered patronising by some, but Angelina, 39,...
Read more on Celebrity Balla
 
Jennifer Aniston pranks radio reporter
Jennifer Aniston turned an interviewer into a shaking wreck by pretending to be offended at his questions. The 'Horrible Bosses 2' actress was asked by BBC Radio 1's Chris Stark how she would approach a guy in a...
Read more on Celebrity Balla