Out of Control Policy Blog

The Ethanol Shuffle

Talking to a reporter about ethanol today reminded me how many classic elements of bad policy are wrapped up in the ethanol issue.

Ethanol started as a bust. Originally pushed as an additive to gasoline to help reduce emissions, it did not work. From a 2003 Reason study on ethanol:

The Environmental Protection Agency formed a Blue Ribbon Panel in 1999 to study the health
benefits of fuel oxygenates. The Blue Ribbon Panel report highlighted the fact that the air quality
benefits of oxygenated fuel are unclear. The Blue Ribbon Panel recommendation was to eliminate the oxygenate requirement altogether.

In other words, the EPA repudiated ethanol as a clean air additive (see the whole deal here). New research from Marc Jacobsen at Stanford confirms the EPA's conclusion:

Due to its ozone effects, future E85 may be a greater overall public health risk than gasoline. However, because of the uncertainty in future emission regulations, it can be concluded with confidence only that E85 is unlikely to improve air quality over future gasoline vehicles. Unburned ethanol emissions fromE85may result in a global-scale source of acetaldehyde larger than that of direct emissions.

[Effects of Ethanol (E85) versus Gasoline Vehicles on Cancer and Mortality in the United States - warning, technical]

But advocates and corn state Congressmen quickly shifted to "Ethanol will reduce our use of oil, especially that evil mid eastern oil. yeah, yeah, thats the ticket."

But there is plenty of reason to believe that ethanol will do litle to reduce oil use--beacuse with ehtanol you have to use more gasoline to go a mile in your car, plus it takes lots of fuel to produce the crops and turn them into ethanol and get the ethanol into your tank. That same Reason study did a benefit-cost analysis of the ethanol mandate and showed the total energy balance from using ethanol is probably at best a tiny bit positive. Even Consumer Reports magazine did a nice accessible article "The ethanol myth."

A long string of government policies on alternative fuel vehicles have not worked. Ethanol was one of them. But like a zombie from Shaun of the Dead it is back and making me laugh in a sickened way. We'll have alternative fuel vehicles someday, when the market gets us there. And they have a tough row to hoe to beat out hybrids, which are doing quite well.

Adrian Moore is Vice President, Policy


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