For years now we have been told that it is good for the environment that ethanol is placed in our gasoline. It reduces the amount of gasoline used, so it extends those resources for future generations and also reduces carbon emissions. Another argument frequently touted by ethanol advocates is that putting ethanol in gasoline encourages farming and produces jobs and demand for farmers.
We will debunk both of these claims. First, that ethanol is beneficial to the environment. While fewer carbon emissions are touted by using ethanol based fuels, the increased farming activities for ethanol products has vastly increased this industry’s output of emissions. When not enough ethanol is available to buy, refiners can buy ethanol credits instead. This has created an industry where many companies simply buy and trade ethanol credits, making out with millions of dollars, having done nothing to help the environment or reduce emissions.
Corn ethanol also has a large impact on water use. Ethanol requires 15,800 gallons of water per million BTUs produced. Soy bio-diesel requires 44,500 gallons of water per million BTUs produced. The very energy sources activists are trying to remove from our energy portfolio, fracking and nuclear, use only 3 and 11 gallons of water for every million BTUs, respectively. With states like California experiencing massive droughts, encouraging ethanol use seems unwise.
Well what about creating jobs and encouraging ethanol use? Although the ethanol industry receives no subsidies, it receives something far better for them and more susceptible to crony capitalism. There are government mandates in place requiring ethanol use. While they don’t receive subsidies, the industry has a guaranteed market that is forced to buy their product, no matter how inefficient it may become, and even if there are cheaper, more environmentally friendly alternatives.
The ethanol mandates have drastically increased the price of poultry and beef, because animal feed is so much more expensive. Ranchers just don’t have as much corn to buy because so much is going to the ethanol industry, thus decreasing the supply and increasing the price. This in turn only hurts low income Americans; increasing the price of chicken and beef to eat, especially around the holidays.
All these decisions have ripple effects throughout the economy. Based off this data, Congress should end the ethanol mandates and let consumers decide if they want ethanol in their gas. Until then, costs will continue to rise, with little to no beneficial affects on the environment.