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Wall Street Journal Editorial: Ethanol "Bad Deal for Consumers" with Minimal or Negative Environmental Benefit

Tuesday, June 2, 2009

(American Meat Institute)

Ethanol is like the old joke about the baseball prospect who is a poor hitter but a bad fielder -- it doesn't reduce CO2 but it does cost more, according to a recent Wall Street Journal editorial.

“The Obama Administration is pushing a big expansion in ethanol, including a mandate to increase the share of the corn-based fuel required in gasoline to 15 percent from 10 percent,” the editorial states. “Apparently no one in the Administration has read a pair of new studies, one from its own EPA, that expose ethanol as a bad deal for consumers with little environmental benefit.”

The editorial points to a report by The Congressional Budget Office (CBO)  last month that found Americans pay a surcharge for ethanol in higher food prices. CBO estimates that from April 2007 to April 2008 "the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices." Americans spend about $1.1 trillion a year on food, so in 2007 the ethanol subsidy cost families between $5.5 billion and $8.8 billion in higher grocery bills.

The editorial also quotes a second study — by the Environmental Protection Agency's Office of Transportation and Air Quality – which explains that the reduction in CO2 emissions from burning ethanol are minimal and maybe negative. "As with petroleum based fuels, GHG [greenhouse gas] emissions are associated with the conversion and combustion of bio-fuels and every year they are produced GHG emissions could be released through time if new acres are needed to produce corn or other crops for biofuels," the report found.

The EPA study also explores a series of alternative scenarios over 30 to 100 years. In some cases ethanol leads to a net reduction in carbon relative to using gasoline. But many other long-term scenarios observe a net increase in CO2 relative to burning fossil fuels.

“The ethanol lobby is attempting a giant bait-and-switch,” the editorial concludes. “Keep claiming that cellulosic ethanol is just around the corner, even as it knows the only current technology to meet federal mandates is corn ethanol (or sugar, if it didn't face an import tariff).”

To view this editorial in its entirety, click here: www.meatinstitute.org/ht/a/GetDocumentAction/i/50380.


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