Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

13 October 2010

The Battle Over Ethanol Limits in Gasoline

Congress has mandated that renewable fuels must provide 36 billion gallons to be blended into the domestic fuel supply by 2022.  This means principally that ethanol must be blended into gasoline to meet this requirement.  The ethanol trade group Growth Energy, headed up by General Wesley Clark, says this goal cannot be met unless the present EPA limit of 10% ethanol in gasoline is increased to 15%.  The EPA just announced that it has increased the 10% blend limit to 15% for cars and light trucks of model year 2007 and later.

The EPA is waiting for additional research on cars and light trucks of the 2001 to 2006 model years, before deciding whether to increase the ethanol blend limit up to 15% for those models.  Live stock ranchers, auto makers, oil refiners, and many environmental groups oppose an increase in the blend limit.  Live stock ranchers do not want their feed costs to go up as more and more corn is converted into ethanol.  Auto makers are concerned about lower performance from engines and damage caused by higher ethanol blends.  Many of their warranties are voided by the use of 15% ethanol blends, called E-15.  Oil refiners simply do not like having to make still more blends of gasoline.  The many blends cause their production costs to go up, which means they must charge their customers more.  Environmentalists are concerned that engines degraded by ethanol will emit more pollution.

There is concern about people being confused at the gas pumps by the additional blends of gasoline.  But this brings up the interesting issue of even if the EPA allows 15% ethanol blends, who would want to use them?  They will be more expensive per mile driven and cars and light trucks using them will suffer some performance loss.  The answer is probably that some states will start requiring their use through some means or other.  Will that be by subsidizing the high ethanol blends or will they actually mandate that people with newer vehicles must use the higher blends, despite their higher costs and performance degradation? 

There are strong lobbyists, such as the ethanol refiners and corn farmers who are conniving to get their states to make such requirements.  This will not be good for most Americans.  This is just one more example of factions and special interests taking advantage of most Americans for their own financial gain by using the force of government to remove themselves from the free market into a protected, crony status.  As I have often noted, the only way to prevent such crony and faction based rip-offs is to limit the power and scope of all of our governments: federal, state, and local.  Questions are being asked about why this announcement was made just prior to the mid-term elections, but the increased use of ethanol is popular in many rural areas of the Midwest.  Pleasing those special interests prior to the election is the reason for the timing.

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