Ethanol: Poor Test Results, Other Negatives

Last month the automobile website www.edmunds.com ran a comparison of costs, performance, and efficiency of regular gasoline and E85, the fuel that is 85 percent ethanol and 15 percent gasoline. (The common ethanol product is 10 % ethanol and 90 % gasoline.) The test drive consisted of a 667-mile roundtrip from San Diego to Las Vegas, which is a popular trip for residents of southern California. However, the two cities were chosen for the test because San Diego has California's only E85 source available to the public, and Las Vegas is the next closest source of E85. The vehicle for the test was a flexible-fuel 2007 Chevrolet Tahoe.

The San Diego-Las Vegas roundtrip used 36.5 gallons of regular gasoline but required 50 gallons of E85, for fuel economies of 18.3 mpg and 13.5 mpg respectively. Thus fuel economy was 26.5 percent worse for E85.

The gasoline cost $3.42 per gallon, compared to $3.09 for E85. But because of the poor fuel economy of E85, so much more fuel was required that 22.8 percent more was spent for E85 than for the gasoline for the same distance.

For acceleration performance, (such as passing, uphill), “the test times were generally slower for E85 [but] the difference was small enough to go unnoticed by most drivers.”

Relating fuel economy to emission figures, the test team determined that gasoline produced 706.5 pounds of carbon dioxide, compared to 703.1 for E85. The conclusion: “Call it a tie. This is certainly not the reduction in greenhouse gas emissions we had been led to expect.”

The edmunds.com test did not calculate other emissions, but EPA has previously admitted that ethanol produces more hydrocarbons, oxides of nitrogen, and ozone—all components of smog—than regular gasoline. Ethanol also has higher evaporative emissions than gasoline.

A previous blog posting on ethanol points out that it is a net energy loser: it takes more energy to grow the corn and distill the alcohol than you can get from burning the product—despite assertions to the contrary from the ethanol advocates. (See http://www.amlibpub.com/liberty_blog/2007/01/ethanol-is-net-energy-loser.html). There are also many other negatives about ethanol that don't seem to have been considered by the politicians who are so eager to buy votes for themselves by doling out taxpayer subsidies to the ethanol industry. Promoting ethanol has boosted the price of corn, which benefits the corn farmers but has pushed up the costs for consumers—not only in the U.S. but for the poor people of Mexico, who have seen the price of corn for tortillas, the staple food in their diet, skyrocket. Also, the U.S. cattle, hog, and poultry industries have raised prices for consumers because of the higher costs for feed corn. (Animal feed is the largest use of corn.) In turn, the American meat-packing industries—which are major exporters—have become less competitive internationally. We are told that ethanol will reduce our imports of foreign oil, but an unintended consequence is a reduction of our exports. Tallow, a fat that is extracted from cattle, is an important ingredient in soap . But the rising tallow price—due to the rising cost of feed corn—is “causing a radical change in the structure of our marketplace,” says Dennis Griesing, a vice president of the Soap and Detergent Association. Some major companies are now importing more expensive palm oil as a tallow substitute. This leaves them vulnerable to competition from Indonesia and Malaysia, which have better access to palm oil and cheaper labor. “Our companies will have to change their formulations,” says Greising. “They'll never come back to the tallow base and pretty soon, voila, we've killed off another American industry.”

Ethanol is supposed to reduce our imports of oil—but we are importing ethanol! Is that any better than importing petroleum—a much more efficient fuel? Last year, according to the U.S. International Trade Commission, our imports of ethanol quadrupled. In 2006 we imported 400 million gallons of ethanol from Brazil alone, compared to just 31 million gallons from that country in 2005.

And not only is ethanol of no benefit regarding air pollution, there are other environmental costs, too. Brazil is cutting down its tropical forests to produce more ethanol, and Indonesia and Malaysia are cutting down their forests to create more palm oil plantations. In the U.S., marginal land devoted to wildlife under the U.S. Dept. of Agriculture conservation program is being converted to growing ethanol, with consequent loss of wildlife habitat. Then, too, each gallon of ethanol requires 1,700 gallons of water (mostly for growing the corn—leading to severe soil erosion) and produces 6 to 12 gallons of noxious organic effluent.

California governor Arnold Schwarzenegger spent $17 million in the last two years on flex-fuel vehicles in order to create an image of environmental consciousness. Those 1,138 state vehicles have traveled 10 million miles and burned more than 413,202 gallons of gas—but not one drop of E85, the fuel that was supposed to bring the environmental benefits. They're too far from the one station in the state that sells E85, and no other stations are scheduled to open before December 2009. Meanwhile, according to an article in the San Jose Mercury News, “the flex-fuel vehicles are actually chugging out more smog and greenhouse gases than many of the vehicles in the state's old fleet—as much as 2,000 tons annually.” This is the fifth attempt in two decades to shift state vehicles to a cleaner fuel. The other four all failed and cost the taxpayers millions.

In 1981 California started buying cars that ran exclusively on M85, a blend of 85 percent methanol and 15 percent gasoline—even though there were then no M85 pumps. The state subsequently stepped in and financed 50 pumps but eventually had to abandon methanol. Over the next 15 years, the state invested at least $60 million in various alternative fuel schemes: electricity, propane, and compressed natural gas. Each time fueling stations were built, and each effort failed. “The same thing happens every time,” says Bob Sonnenfelt, President of the Northern California-based Public Fleet Supervisors Association, “The program dies, like it did with methanol, and they start another one.”

Politicians still claim they can do better than the free market in allocating resources and directing economic activities. And as long as a majority of voters believe this, the government will keep on trying. And keep on failing. Government can only take action against the market, which means to go against economic reality. When government sacrifices economy—that is, wastes taxpayers money—in the name of achieving environmental objectives, the usual result is environmental losses as well as financial ones. The free market is not the enemy of the environment but the way of utilizing it most efficiently and with the least environmental cost, just as with economic efficiency. But the environmental losses from government programs are usually not apparent to the voters demanding government “do something” about every real or alleged problem or desired objective.