The march to E15-ity and beyond continues, with DOE submitting vehicle tests for how older cars performed with the higher blends of ethanol. EPA allowed blends up to 15% for model 2007 and later vehicles in October 2010, and is expected to rule on earlier models (2001 and later) this month.
A few elements of this whole issue continue to puzzle me. First, with DOE a strong proponent for ethanol blends for so long, was there no more neutral party to test the impact of the blends on vehicles? Second, Reuters notes that EPA delayed its decision on later model cars "after the Energy Department said it needed to redo several tests because some of the cars were not properly prepared." While Reuters says that "the additional testing was not directly related to the E15 fuel," I could not locate information from DOE on what exactly the proper preparation was related to. I wonder if this argument would work when my kids take their SATs?
In related news:
- Domestic production of ethanol, the vast majority of it from corn, reached an all time high of 27.4m barrels in October 2010. This underscores the industry pressure to boost mandated consumption of ethanol fuels as much as possible. There was no imported ethanol that month, though exports of the subsidized fuel were way up year-on year. It's simple subsidy arbitrage.
- Fuel ethanol now using nearly 40 percent of the US corn crop. The larger the share of corn absorbed to make fuel ethanol, the more important the many subsidies to corn production become to the economics of fuel ethanol. These include large subsidies to irrigation, corn production, and poor control of nutrient runoff of corn fields that are heavily polluting the Gulf of Mexico.
- The US auto industry has joined a growing array of affected parties suing the government on the E15 rule. Since the auto makers get not a penny from the fuel you put in your car, one would think that perhaps there are real engineering and performance issues they are concerned about. As far as I know, neither Bob Dineen or Matt Hartwig at RFA have taken up my 2009 suggestion to put their personal assets as collateral should the higher blends they are pushing so hard for do end up damaging the vehicles -- among the most expensive assets most Americans own. It's simply aligning interests; and if the risks of damage are as low as they say, it should be an easy bet for them to make.
- The final rule for the Biomass Crop Assistance Program (BCAP) was released a few months back. BCAP provides subsidies to farmers for producing feedstocks they convert into "environmentally-preferable" second-generation cellulosic ethanol. To be effective, BCAP subsidies need to outbid the subsidies to farmers already get for current production patterns, such as land used to produce corn and corn ethanol. It's an ironic policy twist that has the government bidding against itself. However, the final rule does not ensure that subsidized production is actually done in a sustainable manner. In fact, only intense lobbying protected the bark and mulch industry from losing feedstock to subsidized fuel production. The subsidization of energy conversion undermining other uses of raw materials is not a new issue. The soap and detergent industry was harmed by subsidies to biodiesel undermining their purchase of fats and oils. Similarly, widespread subsidies to energy generation in basic industries such as paper and steel, and to landfill gas and waste-to-energy facilities all undermine the markets for recycling secondary materials since the recovery of the embedded energy these materials contain becomes less valuable.
- Fox News rags on Al Gore for reversing his position on ethanol, now recognizing they are very much a mixed bag environmentally. Would I have preferred Gore do this some years ago? Sure. But I'm glad he is doing it now. And I would welcome a similar reversal by Fox News on nuclear power, recognizing that it, too, should not be a kept industry of the federal government existing merely due to its access to the flow of federal support.
