Ethanol Losing Traction

October/16/2009 17:35PM
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I have written in this blog repeatedly about the scam ethanol producers have perpetrated on the American public. It is a net energy loser. After all energy inputs are added up to produce a gallon of ethanol, the result is negative. Archer-Daniels-Midland has led the charge on this for years. Under the guise of the Corn Growers Association, ADM has done all their marketing for 30 years in statehouses and in Congress. They got the tariff on Brazilian ethanol imports. They got the Bush administration to put the mandates on increases in ethanol into law. They got the billions in taxpayers subsidies from Washington. They silenced the auto industry on the damage ethanol can potentially do to cars. They got it all.

This article was published on AOL.

“A new wrinkle in the conflict between these two industries(auto industry and ethanol industry) was introduced in mid-September, when several U.S. Senators co-sponsored a bill that, if passed, would freeze the previously-mandated production of corn-based ethanol at this year’s level – instead of boosting those production levels significantly over the next few years as required by a law passed in ‘08.

That legislation required an annual increase in the amount of ethanol produced in the U.S. — from the 4.7 million gallons produced in ’07, to 9 million gallons this year, and then increasing up to 15 billion gallons by 2015. One of the co-sponsors of the bill, Sen. Susan Collins of Maine, cited concerns about how that mandate has impacted food prices – and how it will do so in the future.

According to the latest available commodity price reports, the combined price of corn, wheat and soybeans has spiked by more than 400 percent since early 2006.

“Hard-working families are being squeezed between skyrocketing energy prices and soaring increases in food costs,” said Collins in a statement. “I am concerned that the increasing use of food crops to produce biofuels, such as corn-based ethanol, is contributing to the rising cost of food. Freezing the mandate is a common-sense approach to immediately addressing this problem.”

The ’08 legislation – dubbed the Energy Independence and Security Act (EISA) – gave the EPA with the authority to waive the mandates, or adjust them as necessary if consumers were in need of price relief.

Additionally, in April, several senators, including Collins, co-signed a letter to the EPA asking for a status report on ethanol. And, an investigation into the damage ethanol may to to cars.”

So, why did the light suddenly go on with Congress? Will ADM defeat this challenge like they have all past challenges?

ADM lobbied for the mandate on aromatics which forced ethanol into the mainstream retail gasoline market. Two products, ethanol and MTBE can reduce aromatics in gasoline during summer driving season. Once the levels were put into law, many oil companies opted to use MTBE. ADM led a charge that started in Alaska that banned MTBE leaving only ethanol. Knock sensors in cars produced in the past 20 years make aromatics unnecessary. But, the law remains on the books.

Suddenly, the government now runs two big auto manufacturers. The threat of massive recalls brought about by ethanol damage has the attention of the politicians. If there is anything good coming from the government running two car companies, maybe this is it.

Once put into a free market situation, ethanol will die as it should as a fuel substitute in the US. Is it too much to ask for our government to turn it’s back on ADM after letting them bilk taxpayers for 25 years?

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