Saturday, October 13, 2012

The Great Ethanol Scam

By Alan Caruba
The rocketing costs of gasoline and the price of corn being paid worldwide are the result of U.S. government mandates requiring the inclusion of ethanol in the gasoline all Americans must use. The time has long since passed to eliminate ethanol from this primary fuel.
A recent report by ActionAid USA, “Fueling the Food Crisis: The Cost to Developing Countries of U.S. Corn Ethanol Expansion” is based on work by researchers at Tufts University. ActionAid USA is an anti-poverty group. The study found that the corn-importing countries of Central America and North Africa are at the highest risk from ethanol expansion—the requirement to include ethanol with gasoline.
“Strong policy should not be based on prayers for good weather, especially when the stakes are so high. From the U.S. Environmental Protection Agency to the G20, it is time to recognize that current biofuel mandates are unsustainable,” said Kristin Sundell, a policy analyst for ActionAid USA.
The group is calling on G20 leaders who are meeting on World Food Day, October 16, to eliminate incentives that encourage unsustainable biofuels production.
The idea behind ethanol is that it reduces carbon dioxide (CO2) emissions and, in doing so, it saves the Earth from global warming/climate change, but CO2 plays no role in climate change, and shows up well after any increase or decrease of temperatures. Ethanol is bad science. It is bad for the engines of cars that must use such a gasoline blend. It increases the cost of gasoline and all other corn-based products. It actually increases the amount of CO2 in the atmosphere. And it reduces the mileage a car can achieve with pure gasoline.
An authority on the U.S. oil industry is Sel Graham, the author of “Why Your Gasoline Prices Are High”. He is a man with more than fifty year’s experience, first as a petroleum reservoir engineer and later as an oil and gas attorney. He is also a graduate of West Point.
Here’s what Graham has to say about the current gas prices:
“Gasoline prices could be decreased instantly by President Obama if he wanted to do so.  Republicans have not yet picked up on this issue.”

“Abolishing the ethanol mandate requiring ethanol to be blended with gasoline at the pump or waiving the Renewable Fuel Standard (RFS) would: (1) lower gasoline prices by millions of dollars; (2) result in billions of miles of free travel annually; (3) prevent millions of tons of additional carbon dioxide from being emitted into the air; and (4) improve national security and the energy picture since it is impossible for US ethanol to ever replace foreign oil imports.”  

“The following is reference data for skeptics. Gasoline prices can be lowered instantly by either abolishing the ethanol mandate which requires that ethanol be blended with gasoline at the pump or waiving the RFS.  This would eliminate the millions of dollars in waivers which refineries are required to purchase because there is no cellulosic ethanol production, thereby decreasing the price of gasoline."

"The 2012 RFS for cellulosic ethanol is 8.65 million gallons.  Cellulosic ethanol production through August 2012 has been only 20,069 gallons, a shortage of 8.63 million gallons requiring $0.78 per gallon waivers.”

An essential truth that few Americans are aware of is that “The price of U.S. oil is always lower than the price of foreign oil. Last year, U.S. oil averaged $95.73 per barrel, $7.25 cheaper than foreign oil imports at $102.98 per barrel. If U.S. oil replaced the 3,261 million barrels of foreign oil imports, it would be a savings to Americans of $23.6 billion annually.”

Given the enormous oil reserves in America, both domestic and offshore, there is no reason why they should not be extracted, but the environmental movement in combination with the Environmental Protection Agency, the Interior and Energy Departments, has restricted access to our own oil.

The ethanol mandates are not just robbing Americans at the gas pump, they are endangering the cost of food prices worldwide

Current government energy policies are a definition of insanity.

© Alan Caruba, 2012


LV said...

Mr. Caruba;

Thank you for reporting on this subject. I have also noted the parallel between the food shortages around the world and the increased replacement of ethanol in the gas supply chain in the past decade. The study you cite is the smoking gun on the subject.

One final note, in the quote from Sel Graham, the fifth paragraph; "replaced the 3,261 barrels" I believe should read "replaced the 3.261 million barrels".

As always, you have hit the nail on the head with this post.

kindest regards,


Alan Caruba said...

Thanks for catching that error. The text has been corrected.

pela68 said...

Oh- you are lucky.
Here in Sweden we pay 9.39 per gallon as of now!

Harry Dale Huffman said...

I will hope to see if a President Romney is quick to learn on this subject:

Romney's Energy Plan

... and if/just how he will reign in/punish/eliminate the current EPA.

Ronbo said...


The grand & glorious State of Washington sent me two ballots in the mail..

A mistake, I'm sure, but I'm highly tempted to vote TWICE against Obama every other Democrat on the ballot.

"Get behind me, Satan!"

Cheers, Ronbo

Guy in Ohio said...

Ronald, I wonder how many Democrats got two ballots, and how many of them WILL use them? What could easily be explained away as a simple mistake will almost certainly benefit Democrats, who have repeatedly demonstrated their willingness to cheat. Their "ends justify the means" mentality will almost certainly allow them to vote "early and often" without guilt ...