Regarding the editorial in the Nov. 23 Journal titled “EPA Denial of Ethanol Waiver Is Bad Policy,” I would like to make two things clear at the beginning. First, I do work as a consultant in the agribusiness industry, which includes corn processors.
Second, I feel the EPA and its head, Lisa Jackson, have frequently over-reached in their rule making. That being said, I agree with the EPA’s decision not to waive the Renewable Fuel Mandate for a very important reason. Since the inception of the mandate and up to now, ethanol use in gasoline has always exceeded the mandate.
What is poorly understood is that the explosion of the corn starch ethanol industry is a result of the Clean Air Act’s removal of tetra ethyl lead from gasoline, not the renewable fuel mandate.
When the petroleum industry’s preferred substitute for lead, methyl tertiary butyl ether (MTBE) was found to be polluting groundwater, its only practical replacement as an oxygenate and octane enhancer was, and still is, ethanol. The only substitutes for ethanol are the so-called “aromatics” such as benzene, toluene and xylene. They are much more expensive for blenders than ethanol, and benzene is a known carcinogen.
The sudden demand for ethanol as an oxygenate and octane enhancer created a spike in the ethanol price, which made ethanol production hugely profitable. As a result, billions of dollars were spent to create the corn processing ethanol industry because the only feedstock available to produce ethanol in sufficient quantity was, and still is, corn.
To establish a cellulosic industry necessary to produce the amount of cellulosic ethanol mandated in EISA (Energy Independence and Security Act of 2007) would require many billions of dollars. The fact that BP, which is one of the few players that could risk large amounts of capital, has recently terminated its effort to build a cellulosic processing plant tells us that commercial production of ethanol from cellulose is far from reality and may never happen.
I suggest you read the EPA’s Notice of Decision which can be accessed at this website http://www.epa.gov/otaq/fuels/renewablefuels/notices.htm. I specifically recommend that you read pages 27, 28 and 49. EPA clearly states, correctly, that a waiver of the mandate would have no effect on the quantity of ethanol used in motor fuel.
You should also be aware that there is no ethanol subsidy. When the corn starch ethanol industry was in its infancy there was a subsidy. This subsidy, as is the case with most government programs, stayed in place far too long. Once ethanol became the octane enhancer of choice, there was no need to continue the subsidy, and it was finally eliminated in 2011.