Obama's EPA May Punt on Ethanol Decision, As Big Corn Argues "Just Trust Us"
November 14, 2012 3:40 PM
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(Source: Getty Images)
"We'll tell you next month" is the likely word from the EPA
Stop me if you've heard
one before. It's the eleventh hour and the Obama administration is facing a crucial decision, one that could have a deep impact on the nation's economy and a united voice of experts is facing noisy opposition from special interests. It's game time and the administration is on the field, ready to make the big play... and they instead choose to punt.
That's the likely scenario
The Detroit News
regarding ethanol waivers, a decision which was supposed to be made this week by Obama's iteration of the
U.S. Environmental Protection Agency
I. Federal Government Backs Corn Ethanol Despite Massive Drawbacks
The EPA derives its power to regulated fuel economy from the
Clean Air Act of 1963
[PDF], a law which was most recently amended
by Congress. A key question in recent years is whether the EPA can dictate what fuels the market should sell or blend. The last two Presidents -- Barack Obama and George W. Bush -- argued the answer to that question is "yes". The most crucial effort to that objective was the
Energy Independence and Security Act of 2007
(EISA), signed into law by President Bush.
Under the EISA, which has been actively backed by President Obama, each year gasoline sellers in the U.S.
must blend in more and more
ethanol to help the U.S. meet "targets".
President Bush and Obama have backed the federal government manipulating the economy to push corn ethanol at the pump. [Image Source: Nation Corn Growers Assoc.]
But despite its status as America's most used alternative fuel, serious questions surround ethanol and whether it really helps the environment at all. While domestic ethanol production does offer a
small shred of domestic security
by removing some dependence on volatile foreign sources, studies have also shown that it actually
increases greenhouse gas emissions
increases food prices
In other words, the body of current evidence clearly points to corn ethanol -- the most abundant form of ethanol in the U.S. -- being bad news for both the U.S. consumer and the environment.
Automakers also say that higher blends of ethanol
will damage the engines of older vehicles
, in turn creating both economic problems. The EPA dubiously says it knows the science better than the people who made the vehicles, arguing that the automakers
Obama and Bush both backed big corn special interests. [Image Source: Politically Incorrect]
In the midst of all the issues, why is there still a modicum of support for government manipulation of the fuel market in corn ethanol's favor?
Big corn has long been one of the nation's most powerful special interest. Corn farmers have benefited from
billions in yearly government subsidies
, with a major chunk of it coming from ethanol grants and mandates. In total, corn farmers drew $73.8B USD from 1995-2009 from the U.S. federal and state governments.
II. Big Corn v. Everyone Else
Indeed the latest debate regarding ethanol comes down to
"corn farmers" vs. "everyone else"
-- including their fellow farmers.
Amidst a record drought, feed prices are soaring. Livestock farmers have resorted to
feeding their cows candy
to try to keep from going bankrupt or letting their herd die. Meanwhile, corn is being actively fermented (or wasted, according to critics) into ethanol, putting further pressure on prices. And the EPA's fine-backed blending demands are the key factor driving that trend.
Without intervention, record corn prices coupled with drought may push small farms out of business. [Image Source: US News]
The corn farmers argue that they can't release information showing what their yields are; information that could validate the desperate farmers claims. Instead, their argument boils down to "just trust us", as they fight a potential EPA waiver to help the struggling farmers.
The Michigan Farm Bureau
comments "[We don't believe keeping the blending targets] would severely harm the economy of Michigan at this time. We do not have final harvest numbers, making it premature to determine what our total crop supply will be in 2012."
The National Corn Growers Association
[PDF], "We believe the burden of proof for severe harm to the economy falls on the petitioner. We believe the petitioners have failed to establish this proof, since higher feed prices are only one piece of a complicated economic puzzle."
III. Blending Targets May Kill Small Farmers' Businesses
On the other side stands a united group of farmers, state, and federal politicians.
Corn prices are
up 60 percent
on the year, and food prices are expected to rise 3.5 percent or more this year -- and more next year -- largely due to ethanol pressure. Corn prices have jumped 400 percent since the federal government backed corn ethanol under the Bush administration.
Eight state governors and 200 members of Congress have
written a letter
(on behalf of the slightly ironically named
National Pork Producers Council
) to the EPA pleading with it to relax blending rules via a waiver, at least for the rest of the year. Delaware and Maryland's governors write that without a waiver the EPA would be creating "the loss of thousands jobs."
A number or researchers also signed a letter calling for a waiver. Among them is
John M. DeCicco
University of Michigan
School of Natural Resources and Environment
, "The (Renewable Fuel Standard) diverts potential food crops to produce fuel, which drives up food price volatility and global food prices."
Big corn donates deeply to federal politiicans, who in turn reward it with billions in subsidies.
[Image Source: Agriculture.com]
It would be awfully hard for the Obama administration's EPA to deny the waiver in the midst of such overwhelming support. On the other hand, it would be equally hard to turn their back on big corn special interests. Those affiliated with the National Corn Growers Assoc. alone poured close to $500,000 USD to candidates on both sides of the aisle in 2012 [
] (the majority went to Republicans, likely due to their more critical stance on ethanol, which big corn hoped to soften).
IV. Silence From the EPA
The EPA released a brief comment remarking, "EPA is completing its review and analysis of the RFS waiver requests and the agency plans to reach a decision shortly."
But Tuesday's deadline for a decision came and went without any word about the status.
The EPA appears ready to punt on the waiver. [Image Source: How to Punt a Football]
Late last year Congress
finalized the cut to corn ethanol's tax subsidy
. But the influx of money from big corn has some on The Hill calling for a renewal of an effort to force corn ethanol on the consumer, regardless the cost to the economy and the environment.
Amidst that backdrop, the only noise coming from the EPA is the sound of crickets as the waiver requests are punted deeper downfield.
The Detroit News
This article is over a month old, voting and posting comments is disabled
RE: Face punches for all
11/15/2012 4:41:08 PM
i'm not an ethanol backer. but i'm showing the benefits and downfalls.
it takes ~30% more fuel to create the same amount of energy in a flex fuel vehicle.
a flex fuel vehicle is also designed to run on the lowest grade gasoline thats most common.
if you were to design an e85 only vehicle, your compression ratio wouldnt be just 12:1 like most direct injection cars that require 93/95 octane. its more in the neighborhood of 14-16:1.
this allows you to extract far more energy out of the same amount of fuel used. this also allows you to use a smaller engine thus reducing your fuel usage.
also, it does not require more energy to grow than is given. its low, something like 1.3x(1x being 1 for 1 extraction) energy as a fuel produced for how much energy is used growing, processing, and shipping the food and fuel. but that also changes based on who you go to for your source of information and what kind of farm its grown on.
a study done during the bush administration....)
then problem as i said before, it needs more fuel(its something like 9:1 AFR to reach stoichiometry with e85 vs gasolines 14.7:1 AFR) to achieve a controllable burn of the fuel. go look up what power people manage on pump e85(with 85% ethanol that is) and they manage much more power out of turbo and supercharged engines. you can make more power out of a given engine if its tuned/made for e85 and high octane. which is why when you design an engine to truely make use of e85. it makes more power.(yet another reason why we need small turbo engines, low boost for 89/93 octane, high boost when it recognizes it has e85 without the increased emissions of a big engine, and the horrid efficiency due to not being able to extract all the energy possible.)
RE: Face punches for all
11/16/2012 7:07:55 PM
And when you take all this into account, you get roughly the same MPG from an engine built specifically for E85 compared with an engine built specifically for unleaded gasoline.
The E85 engine has the downside of requiring some additional hardware for very cold starts, but otherwise is a smaller, lighter engine for a given power / torque requirement with lower emissions (both carbon and noxious) per mile.
I personally think that the thermal efficiency gains result in a better overall design, but before we can really think about that we need to bio-engineer a viable way to produce the fuel on a large scale.
I think that we'll eventually figure out how to produce it without having to grow crops and mash them up, but not until we stop subsidizing corn farmers. I'd much rather see that money go to bio-engineering research working on algaes for converting sun + salt water --> ethanol + fresh water. Or just not spending that money at all. It's doing no long term good going to support farmers.
I'm probably one of the few ethanol proponents you'll find who dislikes the way the government supports it. I envision a process that could keep billions or trillions of exported dollars in our country paying U.S. worker salaries instead of those of Saudis and their oil tanker crews. If we can discover the right process, we can offset the high cost of domestic labor by not having to transport fuel across oceans, only needing to truck it from the sun belt to the snow belt.
"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive
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