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Thread: The latest ethanol giveaway...

  1. #1
    Vulture of The Western World Eric's Avatar
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    Jul 2006
    The Land of The Edentulites

    The latest ethanol giveaway...

    Flex fuel fuzzy math
    By Eric Peters
    for immediate release

    The sticker looks mighty tempting -- a full-size, seven passenger SUV with a V-8 engine rated at a hybrid-like 33 mpg!

    Too bad it's a sham.

    Unfortunately, the shuck and jive isn't well-known, or apparent to consumers -- who might be gulled into believing they're helping cut down on energy consumption (and saving the planet to boot) when in fact all they're doing is supporting the latest government boondoggle for the benefit of the politically powerful ethanol lobby.

    Here's how it works:

    Under the cover of promoting "renewable" energy, the federal government has put into place a loophole in its Corporate Average Fuel Efficiency (CAFE) requirements -- which require the automakers to achieve a "fleet average" of 27.5 mpg for cars and 21.5 mpg for trucks or face so-called "gas-guzzler" taxes that are passed on to the consumer. This loophole distorts the truth about a vehicle's actual mileage capability -- but only if it's a vehicle made to run on both gasoline or a gasoline-ethanol blend known as E85.

    Such "flex fuel" vehicles are credited with much higher miles-per-gallon capability than they actually get -- on the theory that when they burn E85 (which contains 15 percent corn alcohol and 85 percent gasoline) they are using less gas. Thus, a full-size, V-8 powered SUV like the GMC Yukon is rated at 33 mpg for CAFE purposes -- higher than the current passenger car CAFE minimum of 27.5 mpg -- when in fact it only gets 15 mpg in city driving and 20 mpg on the highway, according to the EPA (which is just below the 21.5 mpg minimum mileage for trucks and SUVS under current CAFE rules).

    The E85 Yukon and vehicles like it may even get lower mileage when running on fuels containing large concentrations of ethanol -- since alcohol-based fuels contain less energy per gallon equivalent than straight gasoline.

    As a result of this loophole, GM, Ford and other automakers have been given a strong incentive to build large numbers of E85-burning "flex-fuel" vehicles -- vehicles which might not make the CAFE cut otherwise and thus be less economic to produce because of "gas guzzler" taxes that jack up the price of a given vehicle by as much as $1,000 or more.

    But the idea is to create market demand for the heavily-subsidized ethanol industry -- not produce more fuel efficient vehicles. According to a NY Times piece by Thomas Friedman, the E85/CAFE loophole "increased U.S. oil consumption by 80,000 barrels per day in 2005 alone." GM has built some 2 million flex-fuel vehicles -- many of them large trucks and SUVs that would otherwise be subject to gas-guzzler fines, absent the clever accounting tricks.

    The ethanol lobby has also been aggressively pushing its product on the supply end -- via a proposal that's been floated in Washington to require E85/ethanol pumps be installed at service stations -- in effect, forcing oil companies to subsidize the product of a direct competitor. (And of a product that is itself already heavily subsidized on multiple levels.) Stations would have to invest in new tanks/pumps and so on -- much if not all of it on their own nickel.

    It would be the equivalent of mandating that McDonalds sell Wendys burgers --or that Ford dealers set aside a portion of their new car lot to sell GM vehicles. Pretty nutty. And at odds with basic principles of a free market. Why should gas stations (or anyone else) be compelled to sell a product they might not want to? In particular, one that is produced by a rival industry which already benefits from generous government protection?

    This, however, seems to be the only way the ethanol lobby can do business in this country -- a consequence of the fact that E85 costs a relative fortune to make, uses oil in its production (everything from the petroleum-sourced fertilizers used to grow the corn to the plants, trucks and other infrastructure involved) and contains less energy per gallon equivalent than still-cheaper regular unleaded. These factors have rendered it a tough sell on the free market.

    But the free market is not what the ethanol lobby is interested in.

    E85 may have a role to play in reducing this country's dependence upon foreign oil. But it shouldn't be over-sold, let alone forced down our throats -- or given special loopholes that encourage circular results such as the production of large numbers of especially fuel-inefficient vehicles like "flex fuel" SUVs and pick-ups.

    Such Enron-esque fuzzy math CAFE accounting isn't fooling anyone.


  2. #2

    Re: The latest ethanol giveaway...

    Only a lawyer or politician could thinkk like that. The fact is that with ethanol-laced gasoline one will use more fuel, not less and will spend more money to do it. Is there anyone at any level of government at a policy-making level with any technical background? This ethanol thing is just a shock to me.


  3. #3
    Vulture of The Western World Eric's Avatar
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    Jul 2006
    The Land of The Edentulites

    Re: The latest ethanol giveaway...

    This ethanol thing is just a shock to me. "

    Follow the money - it's VERY bigbusiness. ADM is a hugely influential lobby....

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