The ethanol industry in the U.S. thrives because we have allowed it to hide the true cost of converting corn to ethanol and we, as taxpayers, have been subsidizing it. When we were importing over 50 % of the oil we use in this country it made some sense, but that picture has changed drastically thanks to the shale revolution.
Corn-based ethanol accounts for virtually all of the biofuels being produced in the U.S. Last year’s corn crop was the largest on record: 14.5 billion bushels. Nationwide, farmers grew corn on 88 million acres in 2015 – a 7.6% increase since 2005, the year when Congress created the Renewable Fuel Standard mandating the use of ethanol in gasoline.
Now is the time – past due time – for Congress to repeal the Renewable Fuel Standard, since it serves no worthwhile purpose. When Congress established the standard more than a decade ago, the U.S. relied on imports for 65% of its oil supply and ethanol was seen as contributing to the nation’s energy security. But oil imports are falling fast. Last year, they plunged to 28%, and they’re still dropping. It’s projected that by 2020 imported oil will meet just 11% of our daily needs. And if increasing domestic oil drilling thanks to shale production continues to grow, the U.S. will almost certainly be a much smaller importer of oil for the foreseeable future than it was thought possible just a few years ago.
The U.S. has instituted a 10% ethanol blend in gasoline, though some service stations are now selling 15% ethanol. Proposed legislation would cap ethanol volumes at 9.7% of projected gasoline demand. But since we’re swimming in fuel and nearing energy independence, the cap should be much lower. After all, ethanol has less energy than pure gasoline. Drivers get fewer miles to the gallon and must fill up more often.
What’s more, food is being used for fuel. The ethanol mandate has pushed up the price of food and many other items that are made from corn products.
Yet the Renewable Fuel Standard calls for an increase in ethanol production, from 18.1 billion barrels this year to 36 billion barrels by 2022. Ethanol production at that level would mean turning over virtually the nation’s entire corn crop to ethanol.
We now have an abundance of oil, thanks to the shale revolution. We can continue to move toward energy independence and a stronger economy. The best way to accomplish that is through increased domestic oil and gas production –and we’re doing that.
There is no need to subsidize the biofuels industry, with government mandates. We would pay a huge price for such folly with higher fuel and food costs as well as environmental damage.
The time has come for Congress to roll back the ethanol mandate, something that never should have been adopted in the first place.
Dr. Robert W. Chase is an emeritus professor at Marietta College, Department of Petroleum Engineering & Geology
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