When a policy enjoys support from opposite ends of the political spectrum, it is either an uncommonly good idea or -- more often -- an uncommonly bad one. The nation's ethanol mandate falls into the latter category.
The mandate -- more formally known as the Renewable Fuels Standard -- requires gasoline suppliers to mix corn-based ethanol into their blends. This year, the standard calls for 13.2 billion gallons of corn ethanol. That works out to 4.7 billion bushels -- or 40 percent of the nation's entire corn crop.
That's nearly as much corn as the nation will use for food this year. (The remainder will go to exports.) Combined with the drought, the mandate has driven corn prices to record highs.
A government policy that makes food more expensive would require considerable justification under any circumstances. But the ethanol consumption mandate makes almost no sense -- except perhaps as a form of corporate welfare for agribusiness giants.
It cannot be said to combat climate change. Human activity contributes only partly to global warming. Greenhouse-gas emissions from transportation sources account for only a part of the human contribution -- and the use of ethanol in gasoline reduces those emissions in the U.S. by only a few percentage points at best. So the mandate is offsetting climate change only marginally -- and whatever minute gains it might be producing are overwhelmed by the far greater increases in emissions from nations such as China.
Nor can the mandate be said to increase American energy independence, because oil prices are set on a world market. If (say) Iran were to blockade the Straits of Hormuz, the resulting global price shocks would blow away whatever marginal difference might be gained from U.S. ethanol production. Of course, the U.S. could stop buying foreign oil entirely -- by converting every last acre of farmland in the United States to corn. Wheat, beans, peanuts -- all gone.
Still, this theoretically would reduce the flow of American dollars going to terrorist-supporting regimes in the Mideast - which is the national-security argument for the mandate. That in turn would justify a massive reduction in defense spending. But talk about energy independence never seems to get around to proposals for slashing the Pentagon's budget. This gives the lie to the idea that petroleum autarky translates into national security.
In short, the renewable fuels mandate is imposing tremendous costs on American consumers while delivering almost nothing in return. It's time for Congress to give it the ax.
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(Originally published August 2, 2012, in The Richmond Times Dispatch.)