Originally published at Cars In Depth
Lost in the hustle and bustle of the holiday season, Congress has quietly ended subsidies on ethanol fuel as well as ending a special import tariff on Brazilian ethanol. The ethanol subsidy paid fuel blenders 45 cents per gallon to make E10, gasoline blended with 10% ethanol. The tariff added 54 cents to the cost of importing a gallon of ethanol from Brazil. The ethanol subsidy currently costs US taxpayers about $6 billion per year. Over the past 30 years, the program has cost $45 billion. By taking no action on the subsidy before adjourning for the end of the year, Congress effectively killed the program.
Though ethanol interests, like corn growers and affiliated industries, have considerable political power, a wide variety of critics, cutting across political lines, had coalesced around the issue, encouraging Congress to let the subsidy end. The food processing and livestock industries joined with environmentalists to oppose the subsidy. The policy was encouraging diversion of corn from feedlots and food processors to ethanol production, raising the cost of foodstuffs. Environmentalists, some of whom used to endorse ethanol as a biofuel, now say that it’s “dirty” because its production is carbon intense.
Ethanol trade groups have said that the industry would survive the loss of the subsidy, now that the US ethanol production industry has become established. The industry is still protected by congressional mandates that call for 15 billion gallons of renewable fuels by 2015 and 36 billion gallons by 2022.
The ethanol issue involves a number of powerful players, corn growers and affiliated industries on one side and food interests, automakers and engine builders on the other. Then there’s the EPA to consider. The EPA has approved the use of E15, an 85/15 gasoline/ethanol blend, for use in post 2001 cars. Manufacturers say that without modifications, E15 will damage engines. In February, in a bipartisan move the House voted 285-136 to block the EPA from moving ahead with E15 regulations.
While ending the subsidy would seemingly discourage ethanol’s use, the end of the 54 cents per gallon tariff on imported Brazilian ethanol might do more to encourage that use than the subsidies did. Brazil is one place where it makes sense to use ethanol as a fuel because of Brazil’s huge sugar industry. The ratio of energy needed to produce it vs the energy obtained in the fuel for ethanol made from corn is barely greater than one, 1.3:1, compared to 2:1 for using sugar beets and 8:1 for sugar cane, the feedstock for Brazil’s ethanol. It costs half as much to make Brazilian cane ethanol as it does to make American corn ethanol. According to one academic study transportation costs to US ports eliminate that competitive advantage, but if that was a certainty, Brazilian sugar cane producers wouldn’t have threatened to start a trade war if the tariff wasn’t ended.
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Categories: Alternative Energy, Cars
“The EPA has approved the use of E15, an 85/15 gasoline/ethanol blend, for use in post 2001 cars.” And what about my 1989 Honda Prelude? Can I sue the EPA for the resultant damage if I’m forced to use the new blends? I have less than 40,000 miles on the odometer (yes, it’s true!) so it isn’t going to be replaced anytime soon.
Good riddance to the subsidies and tariffs. Let technology and the markets find the right balance. That also means dropping production targets and the required use of bio-generated fuels for military aircraft; they currently cost almost ten times what regular fuel costs.
Raymond,
When that Honda dissolves in alcohol, you can buy a new certified “flex-fuel” vehicle from a government approved union manufacturer… say GM.
In fact, Obama may insist.
Now to end the forced use of ethanol in gasoline…
Great news! We in Oklahoma are fortunate in that a few years ago state law mandated notices (i.e., warnings) on fuel pumps that dispense ethanol-laced gasoline. At one time it took some searching to find non-adulterated gas, but nowadays it’s rather easy to find genuine gasoline. Stations selling the good stuff have big signs that proclaim “100% Gasoline”, “No ethanol”, “Genuine Gasoline” and the like. They know it’s what informed motorists want. Real gas usually costs a few pennies more per gallon, but you get better mileage. Moreover, ethanol is poison to lawnmowers, boat motors and older cars. My Honda mower couldn’t idle on the adulterated fuel.
Is that why the price of gas jumped 20 cents a gallon today?
Agree with Raymond in DC. When I see (JAX area) pumps at stations for ethanol free (and/or unleaded) I have to wonder why the bizarre fuel mixes exist. Socialism run amok in controlling what we drive, fuel with, and how much we pay all come to mind. Screw the US Government Congressional ass-hats without the brains to vote on these issues. Got a prob Mr. Congressman? Write me; we are tired of you idiots.
According to one academic study transportation costs to US ports eliminate that competitive advantage,
Hogwash.
Why, then, do we import oil from the Middle East, which is much further away, and requires us to spend far more on other costs?
ME Oil actually costs $250/barrel when ALL costs are added up.
Toads, you can move oil a long distance and have great deal of net energy delivery. Ethanol is a dramatically less efficient way to move energy.
That’s why transportation costs eat up the price advantage to a large extent.
Some support for this assertion would be nice.
This is THE news of the day.
@Raymond in DC
You really have nothing to worry about with E15 as long as your fuel system is still sealed and emissions compliant (basically, fuel cap still seals tight and you pass your evap emissions test – if your area has one).
A car like your Prelude uses OBD0 level emissions and engine management. During part throttle operation, E15 will not affect operation at all, but will result in in about 3% more fuel consumption vs. E0 gasoline, or 1% more consumption vs. E10 which is prevalent in most states. It will also run about 3% leaner during full throttle operation. This will not hurt you car at all.
I’ve been running E85 fuel in one of my pre-2001 cars for years now and while that level of ethanol requires some fuel system changes to compensate for increased fuel demand, there have been no corrosion issues or problems with leaky seals or gaskets. Ethanol is often condemned because its cousin, methanol is highly corrosive, but ethanol is just like the alcohol you drink in your mixed drinks.
I’m glad the subsidies and tariffs have ended – the govt shouldn’t be involved in that stuff – but ethanol is really not a big worry for automotive applications.
According to a USDA report, Brazil is able sell ethanol for $0.87/gallon because it is made from sugar cane which is 8 TIMES (800%) more energy efficient than making it from corn. I am in favor of getting off Middle East oil and if it means buying cheap ethanol from Brazil – so be it.
The ethanol revolution has to start with the CONSUMER. The american population is used to have cheap gasoline and cares next to nothing about carbon, the environment, etc
So anything that alters even a bit that status quo will be quickly labeled with any argument imaginable under the sky.
And since ethanol only has 76% the power of gasoline (regardless of whether is american or not), you can bet a lot of bitching will start when the cheap brazilian ethanol arrives at the pump and people start using it more often.
In other words, when their cars start using more MPG’s, they will claim that did not happen when it was corn ethanol, yada, yada, yada.
It is time for the american population to stop being pampered, complainative sissies, and face the fact that the world is tired of its rants and does not want to pamper it anymore.