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It's okay to gamble with vehicle damage, lobbyists suggest, as you're the one who's paying if they lose

The U.S. National Renewable Energy Laboratory (NREL) has published a report (which the Renewable Fuel Association -- a corn ethanol lobbying group dubbed "analysis") that examined 33 studies at various universities looking at the effects of ethanol on engine wear/failure.  

I. Ethanol Lobby Says Ethanol is Safe -- You do say?

The study [PDF] was not even a peer-reviewed literature review, much less a peer-reviewed scientific study, and was bought and paid for by the RFA to help lobby for the introduction of E15.  And lo and behold, the research team comes to the same forgone conclusion that the Obama administration's U.S. Environmental Protection Agency's (EPA) and the RFA's experts decided when authorizes E15 on the masses -- that "…the conclusion that engines will experience mechanical engine failure when operating on E15 is not supported by the data."

The study's conclusions are that:
  • Several of the studies tested relatively large numbers of engines or vehicles, including:
    • The Coordinating Research Council’s (CRC) engine durability study (28 engines)
    • The University of Minnesota’s in-use fleet study (80 vehicles)
    • The USDOE’s catalyst durability study (82 vehicles).
       
  • The data presented in these studies did not show any evidence of deterioration in engine durability or maintenance issues for E15 (or E20) in comparison to E0 and E10 ( when tested).
     
  • Materials compatibility testing provides no evidence that 15 volume percent ethanol blends will cause increased rates of metal corrosion in comparison to 10 percent blends. In most cases increasing ethanol content from 10 to 15 volume percent had no significant effect on elastomer swell.
     
  • For 2001 and newer cars emission studies also show that engine control units are able to adequately compensate for the higher oxygen and lower energy content of E15.
E15
E15 has been authorized by the EPA, but has yet to roll out to many pumps. [Image Source: Digital Trends]

However, as you can see from the highlighting, the ethanol industry sponsored government review uses a lot of noncommittal language.  The paper even directly admits that the methodology of the studies it carefully picked was less than definitive, writing, "Because of the wide variety of control fluids and unique test protocols, especially for fuel system component, engine, and vehicle durability studies, it is difficult to combine the results into a single analysis."

II. Or Actually They Say They're Not Really Sure But are Willing to Gamble

The study admits that E15 will increase carbon emissions, though it insist that increase is nearly "negligible" and that fuel economy will be lower per fuel volume.  It admits that the studies it reviewed -- many of which only lasted 3 days or less of driving on E15 fuel -- were far from conclusive, with at least some showing damage to hosing, pumps, or other fuel-system components.  It writes:

One pump, identified as Pump N, was shown to have a greater failure rate with standard E15 in comparison to standard E10 in one study, yet did not fail on Aggressive TF10 or Aggressive TF20 in a previous study, and thus the results are inconclusive.

The conclusion that engines will experience mechanical engine failure when operating on E15 is not supported by the data presented in these studies. However, these tests did not include all existing makes and models of 2001+ MY vehicles on the road, and there may be certain components or vehicles which are more susceptible to damage from higher ethanol content fuels. Moreover, vehicle tests which include only eighty vehicles are not adequate to ensure that individual component failure rates will be below the 1 in 1000 rate that OEMs typically expect over the warranty life of a vehicle.

There is insufficient data to statistically support a failure rate prediction.
 

Ethanol warning
Some studies have shown E15 and above can damage engines and fuel systems not specially coated to prevent corrosion. [Image Source: Center for Environment and Commerce]

In other words, its authors argue (and are paid to do so), that there's some evidence that ethanol damages engines and/or fuel systems, but other studies suggest it might not, so we might as well ignore the whole mess and make it legal until we find out who's right.

III. Government Market Meddling -- Who's Right When They're All Wrong?

And the authors have a point.  The U.S. Food and Drug Administration (FDA) has a spotty track record of approving and later retracting questionable medicines, while blocking promising treatments for cancer and other life threatening reasons for seeming arbitrary and/or inexplicable reasons.  The study's general criticism against blocking free market availability of consumer goods makes a valid argument, to an extent.

Check Engine
The RFA's paid researchers aren't arguing E15 will be safe for all older vehicles -- they're arguing they're not sure and they're in the mood to gamble. [Image Source: Hemmings Blog]

A 2001-2008 vehicle (the older vehicles examined in the study) may be damaged by ethanol.  Or it may not be.  It likely depends on the vehicle.  Likewise it will probably be difficult for a vehicle owner to determine with absolute certain whether it was ethanol, or simply other factors like lifetime wear that took out their 2001 or 2002 era vehicle.

But then again, that's not what the current debate is really about.  The current debate is about how consumer protection and environmental laws (e.g. the corporate average fuel economy (CAFE) standard installed by the Clean Air Act of 1963 [PDF]) under the federal government regulates what fuel may be sold to consumers and the automakers are required to go through exhaustive reliability testing to ensure that those fuels do not damage vehicles.

corn profits
We're all paying for corn ethanol's shortcomings, while farming corporations and ethanol refiners profit. [Image Source: Agriculture.com]

In other words automakers are held to a much higher (and more expensive) testing standard than the research studies reviewed in the report, which were admittedly small, short-lived, and inconclusive.  But while it's not entirely clear who is right and to what extent, the law makes it clear who will pay if things go wrong -- the automakers.  So if it turns out that "whoops ethanol DID damage engines", the ethanol industry won't be on the hook for damages (unless it was somehow targeted under a class action lawsuit) -- the automakers would be.  

Or more likely, since most of these older vehicles were out of warranty, the consumer would likely pay.  In other words, the renewable fuels lobby is perfectly willing to gamble on the issue of engine damage which it says may or may not exist, because it's gambling with your money -- not its own.

IV. Big Oil is Only Evil, if it Isn't Pay You

The RFA President and CEO Bob Dineen cheers:

The disputed CRC engine durability study has been at the center of Big Oil’s political crusade against E15, and policymakers have been given the false impression that the CRC project is the one and only study that has been conducted on E15. Nothing could be further from the truth. The NREL report reflects a substantial review of literature on E15 research showing no meaningful concern with using the fuel and exposes the many methodological shortcomings of studies API is citing on engine durability.

It’s time for Big Oil to stop using actors to scare people about E15. It’s time they start paying attention to the overwhelming data and real world experience demonstrating the efficacy of E15.

Again, the ethanol industry ironically gets a lot right in its argument.  "Big oil" did lobby a lot against E15.  But the renewable fuels industry lobbied as hard or harder to legalize it.  It's no coincidence that both of the nation's last two Presidents were firm believers in the controversial alternative fuel from food.

Corn ethanol handouts
Big corn has no problems with handouts, as long as they're for corn. [Image Source: AP]
 
But the reality is that whatever truth there is in the ethanol advocacy's accusations of cronyism and federal government meddling, it's benefited as much as anyone from federal policies.  Under the The Energy Independence and Security Act of 2007's [PDF] Renewable Fuel Standard terms, refiners each year must blend more and more gallons of biofuel, or they'll be fined.  Thanks to that artificial demand, most gasoline sold on the market is current at E10 levels -- about enough for refiners to meet current targets.

While the government no longer directly subsidizes ethanol production at the farm and refinery level, it's not exactly pro-oil-anti-ethanol (or hands-off) either.  It's driving an artificial demand 12 billion plus gallons of ethanol that the free market showed no interest in creating.  That demand has come, at least in small part, at the expense of the food industry, which now is forced to compete with refiners for corn for livestock feed.

Again, the consumers lose from government meddling in the private sector with ethanol, just as they do with it meddling in the private sector by giving ultra-profitable oil producers tax breaks -- the same sort of tax breaks that ethanol enjoyed until recently.

President Obama himself was among the lucky winners of handouts from big corn special interests, although his ties to the corn industry at times have been quieter.  After championing the Energy Act as a young senator back in 2005, ADM began flying Sen. Obama around on their private jet, a true VIP treatment.  And top Obama donor George Soros -- who gave nearly $5M USD to Obama and his fellow Democrats -- is a major owner of ConAgra spinoff, top corn grower, and number three corporate farm conglomerate Gavilon.

V. Big Oil v. Big Ethanol: Whoever Wins, You Lose

It's been a disappointing year of sorts for the ethanol industry.

Complaining that "breaking the [E10] blending wall" and pumping E15 out to stations would damage older vehicles, automakers and motorists united to petition the EPA for a waiver.  

And while the ethanol lobby scored an early win by shooting down that waiver, ethanol producers saw the economics start to catch up to them.  With refinery growth grinding to a halt due in large part to the elimination of government grants for ethanol producers, 2013 production levels are expected to miss their target of 16.55 billion gallons.  As a result the EPA has given refiners an additional 6 months to meet that target, effectively a cut to the 2013 target.

Ethanol lobbyists will refute that the EPA is backing off its targets in any way -- and even the EPA is hesitant to call this "extensions" what it really is -- a cut to targets. But the numbers say what these vested interests are too embarrassed to admit.

The big issue with big oil, big ethanol, and any other fuel isn't so much that they want to sell consumers in good faith, drive domestic production, and make money.  That's the name of the game with capitalism.  The problem is that what some would call bribery -- paying federal political candidates to give you grants, tax cuts, laws that hurt your competitors, and other laws that force consumers to buy your products against their will -- is not only legal in the U.S., it's most of what preoccupies the federal government from the President to Congress and on down the ranks.  

Congress bribes
Is big oil any worse than ethanol?  They're all playing the game. [Image Source: Wikimedia Commons]

Whether it's big oil or ethanol, this catfight, while a legitimate battle for big money, is essentially a lose-lose for the consumers.  If it ethanol wins, we get the artificial pumping of profit into corporate ethanol and corn growing pockets, coupled with higher food prices, lower fuel economy, possibly voided warranties, and higher emissions.  The only gains would be potentially somewhat lower prices per gallon at the pump and some degree of increased domestic security.  But if "Big Oil" wins, it's more of the same -- inflation of prices at the pump to drive profits towards big oil, who in turn escape much of their tax burden through a variety of tax loopholes that regular folks don't have.

Whoever wins, we lose
Whoever wins, we lose. [Image Source: 20th Century Fox]

The take home message from this battle of predatory market meddlers is the slogan from 2004 Aliens v. Predator -- "Whoever wins, we lose."

Sources: RFA [1; PDF], [2]





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