Dumb Ethanol Law Costs Us Plenty

Each year 1/3 of the U.S. corn crop grown on 33 million acres of farm land is diverted from food to ethanol fuel, and it's caused corn prices to triple since 2005, when the ethanol law took effect. Congress made things worse with the 2007 Renewable Fuel Standard (RFS) law. Since then, a 2010 Rice University study that found "no reason to believe" that corn ethanol production and use emit less carbon dioxide than gasoline.

Now there may be a better method to produce ethanol fuel cheaper, faster, and without using corn, reports Christopher Helman at Forbes, but the 2007 RFS law blocks its development in the U.S. because the innovation isn't plant-based. So the Dallas-based chemicals company, Celanese, is taking its innovation to China, where Beijing "issued final permits in March ... for an 80-million-gallon plant."

The corn-dominated ethanol lobby is conflicted about making ethanol out of fossil fuels. On one hand, corn growers don’t want competition from cheap gas. On the other, it’s in the national interest to cut oil imports. “We’re supportive of expanding all renewables and all alternative fuels,” says Matt Hartwig, spokesman for the Renewable Fuels Association. Says Joe Cannon, president of the Fuel Freedom Foundation: “We need every option. There are 2 billion people moving from bicycles to mopeds to cars, and that’s just in India and China.”

Thirteen congressmen led by Pete Olson, whose district around Houston, Tex. encompasses dozens of chemical plants, including Celanese, have introduced a bill to add natgas-derived fuels to the RFS. Any change would face attack from the greens but is supported by animal farmers who want cheaper feed corn. “We would prefer not to have the RFS at all,” says a spokeswoman for Olson, “but this is a step in the right direction.”

Until the RFS law changes, U.S. corn farmers will continue to get ethanol tax subsidies, China will get the benefit of a new US-developed fuel innovation, and US consumers will continue to pay higher prices at the gas pump and the grocery store.

Full article: How a Dumb Law Blocks a Great Way to Fuel America, by Christopher Helman