It's Time To Repeal The Ethanol Mandate

Posted by Tom Fletcher on Friday, October 11th, 2013, 11:52 AM PERMALINK

Even with an energy revolution underway in the United States, the government still makes us pour money into expensive, inefficient, and subsidized energy like ethanol. Due to a law called the Renewable Fuel Standard, consumers are required to fill up their gas tanks with increased amounts of ethanol. This is problematic since forced ethanol consumption means that cars get fewer miles per gallon, gasoline and food prices will increase, and your car’s engine could be in danger as long the Renewable Fuel Standard remains on the books.

Passed as part of the American Energy Act of 2005 and increased in the Energy Independence and Security Act of 2007, the Renewable Fuel Standard (RFS) mandates that Americans must consume billions of gallons of corn-based ethanol. Today, when Americans fill up their car or motorcycle they are doing so with 10 percent of ethanol. Next year, Americans will be forced to use more than 14 billion gallons of corn based ethanol, a number that could increase ethanol’s percentage per gallon of gasoline by 50 percent. If this law is not repealed, Americans will be forced to consume 36 billion gallons of “renewable fuels” by 2022, almost half of which will be ethanol.

The problem with the Renewable Fuel Standard is simple: mixing large amounts of ethanol in gasoline is economically inefficient and can damage vehicles’ engines. A study by NERA Economic Consulting concluded that the ethanol mandate could increase the price of gasoline by 30 percent and increase the price of diesel by 300 percent. Furthermore, ethanol delivers 25 percent fewer miles per gallon than gasoline with numerous studies showing that ethanol’s corrosive properties damage engines. Increasing the ethanol blend per gallon of gasoline, which is what the EPA is considering, could severely damage older vehicles. Fearing the worse, both auto manufacturers and AAA have come out warning against the new standards.

Another victim of the Renewable Fuel Standard are people that eat food – that’s you. With more and more quantities of ethanol being diverted to fuel instead of food, the price of products like milk, eggs, meat or anything made with corn or its sweeteners has increased. Price-Waterhouse-Cooper along with the National Council of Chain Restaurants concluded that increased ethanol requirements will cost fast food and dine-in restaurants $2.5 billion and $691 billion respectively. This means that, due to the ethanol mandate, every restaurant in the U.S. pays around $18,000 extra for food, inflated prices that are certainly passed to consumers.

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