When the embargo hit and oil independence became the big goal, ethanol was introduced as the answer. Archer Daniels Midland fronting for the Corn Growers Association jumped in and began building ethanol plants. Iowa was the hotbed. Ethanol quickly became controversial. It attacked gas lines and carried any water in fuel storage tanks and cars stopped running. It couldn’t be shipped in pipelines because of the water issue and had to be blended at terminals, creating expense. Gasoline mileage in blended fuel suffered. But, the farmers lined up behind the product and with Archer doing the lobbying, it hung in there despite the issues. Scientists proved it was a net energy loser, but that never deterred the politicians or ADM.
Soon they needed help from the government since blending it made it non competitive with unblended gasoline. They got that. Then they worried about Brazil importing cheaper ethanol. They needed a tariff. They got that too naturally.
States outside the farm belt weren’t interested in ethanol. The DOE was worried about aromatics in gasoline in the summer months and subsequent pollution. There were two basic options to solve the aromatics problem. MTBE, a refined product, and ethanol. MTBE was inexpensive and could be shipped from refineries. ADM attacked MTBE and with help from Washington, it went away leaving one solution. Ethanol. But, new cars were coming out with knock sensors solving the seasonal blend issue. Uni-cal was actually buying old cars to get them off the road rather than go to the blends that would not be needed in 5 years. But, ADM beat that too and the blends are still here even though their need went away 20 years ago.
Still not satisfied, ADM went for mandates for ethanol. George Bush took care of that for them.
A product that saves nothing on imported oil, isn’t needed to support farmers anymore, doesn’t need to be blended in gasoline still lives. Yes the tax subsidy went away and the tariff with it, but ethanol will survive despite that. ADM will see to that. And, Iowa with their spotlight caucuses will help.
I remember meeting with then governor Edgar of Illinois(one who didn’t go to prison) and giving him a scientific demonstration that aromatics were becoming unnecessary with knock sensors. Here were his exact words, ” I don’t question the science, your company is well respected, but this isn’t about science, this is politics, and Illinois is a corn state, and we will support ethanol.”
So you will keep paying at the pump so ADM and the ethanol producers and farmers can benefit. For no good reason.
