Politicians just can’t help themselves when it comes to ethanol.
They love the stuff. They lavish generous subsidies on the fuel additive. They adopt ethanol-friendly rules and fuel standards, ostensibly to promote a homegrown, low-carbon alternative to fossil fuels.
U.S. President Donald Trump is the latest politician to fall under the spell. Last week, he ordered the Environmental Protection Agency to allow high-ethanol fuel blends to be used year-round as part of a package of changes to the federal ethanol mandate.
Gasoline in the United States typically contains up to 10 per cent ethanol. The EPA currently bans a 15-per-cent ethanol blend, called E15, during the summer months because of concerns that it contributes to smog on hot days. In Canada, the standard ethanol blend is 5 per cent.
Mr. Trump’s sudden attraction to ethanol, typically distilled from corn, is proof positive that the love affair is not primarily about economics or the environment. The President, after all, is a long-time climate-change denier. In his time in the White House, he’s worked to loosen regulation of the oil and gas industry, and push for greater use of coal.
But ethanol is a political no-brainer. Mr. Trump is eager to shore up the support of Republicans in advance of next month’s midterm elections in corn-growing farm states, such as Iowa, Illinois, Nebraska and Indiana. It’s also a gift to Iowa Senator and judiciary committee chairman Chuck Grassley, who led the successful fight to confirm Mr. Trump’s pick – Brett Kavanaugh – as a U.S. Supreme Court justice.
After announcing the ethanol rule change at a rally last week in Council Bluffs, Iowa, Mr. Trump was blunt about what he expects in return: “You’d better get out there and vote for Republicans,” he told supporters.
Here in Canada, the new federal Clean Fuel Standard and various provincial measures are similarly encouraging greater use of ethanol. Ontario, for example, is doubling the mandated ethanol blend in gasoline to 10 per cent from 5 per cent by 2020.
Corn farmers and ethanol plants stand to benefit. But it’s unclear if boosting the amount of ethanol in gasoline will lower pump prices, as Mr. Trump has suggested, given the added costs refiners and automakers will have to bear.
A broader problem is that producing ethanol is a relatively high-cost and energy-intensive endeavour. Economists at the U.S. Department of Agriculture have concluded that a typical ethanol plant produces fuel with roughly twice the energy value of the energy required to produce it.
But critics disagree, including many environmentalists, arguing that ethanol has an overall negative energy balance after tallying all the various ancillary effects – on land, water, fertilizer transportation and smog. Yes, ethanol is cleaner burning, reducing greenhouse gas emissions. But that carbon benefit comes at a price. A litre of ethanol can only do about 70 per cent of the work of a litre of gasoline, owing to its lower energy value.
There are plenty of other reasons why ethanol may not be the homegrown wonder fuel that farmers and their political allies say it is.
More than one-third of the U.S. corn crop now goes to produce ethanol, up from just 5 per cent in 2000. Reaching the threshold of 15 per cent will require a massive increase in ethanol production, diverting even more land to corn farming and displacing acreage now devoted to producing food and animal feed. Increased demand for ethanol may also contribute to higher global corn prices, imposing a cost on consumers.
Automakers and refiners have long resisted greater ethanol use. Ethanol can damage internal combustion engines and other parts in older models by corroding and dissolving key components. Millions of vehicles now on the road may not be able to handle fuel blended with 15 per cent ethanol.
One of the main government-policy rationales for encouraging ethanol use is that it promotes energy independence by reducing the need for oil imports. That may no longer be valid. Canada is already self-sufficient in oil and must import ethanol to meet current fuel mandates. Thanks to the shale-oil revolution, the United States is on track to become self-sufficient in oil within 10 years, according to the International Energy Agency.
Governments are pushing the limits of what ethanol can do for the gasoline mix. But apparently they haven’t fully tapped its boundless political benefits.