From the Historic Vehicle Association
Field of Dreams, Not Facts: The Truth Behind the Ethanol Myth
According to its advocates, ethanol is the silver bullet for our agricultural economy, environment and will lead the way to our independence from foreign oil. However, a hard look at the facts points to the opposite conclusion. The facts, many from academic and governmental studies, clearly demonstrate that ethanol is not cost-effective, requires massive subsidies, may actually be worse for the environment than fossil fuels, negatively impacts food and commodity prices and doesn’t enhance energy security. As Cornell University’s David Pimentel noted, “when it all comes down to it, ethanol amounts to nothing more than “subsidized food burning”.
The HVA strongly opposes ethanol mandates and subsidies on the following grounds:
• Impact on Historic Vehicles. There have been no studies on the impact of E15 or higher fuel blends on vehicles older than 1994. In fact, the current E15 ruling only allows sale to 2007 and newer models because the compatibility of higher blends with vehicles older than 2007 is problematic. At higher blend levels, ethanol’s chemical properties cause corrosion, reduce fuel economy, burns hotter and can wreck havoc with fuel mixtures and injections.[1]
• Not Cost-Effective. Ethanol requires large government subsidies and mandates. A gallon of ethanol costs $2.24 to produce compared to 63 cents per gallon for gasoline.[2] Each year $4 billion in government subsidies and mandates are needed to fill this gap in production and the market.
• Uses More Energy Than It Generates. Research by Cornell University scientist David Pimentel shows that 29 percent more energy is required to produce a gallon of ethanol than the energy that actually is contained in ethanol. For each gallon of ethanol, there is a net energy loss of 22,000 BTU (British Thermal Units).[3]
• Negligible Environmental Impacts. Ethanol has a host of negative environmental impacts that wipe out any positive impacts. Studies by the California Air Resources Board show that blending ethanol with gasoline increases nitrogen oxide (NOx) and other smog-forming emissions.[4]
• Could Void Car Warranties. New car manufacturers won’t cover engine problems that result from using fuel blended with more than 10% ethanol.[5]
• Lowers Gas Mileage. Ethanol-blended gasoline decreases gas mileage by 3 to 5 percent at 10 percent ethanol blend and reduces economy by up to 20% percent with with intermediate blends of 15 and 20 percent ethanol – increasing costs to consumers.[6]
• Hurts Livestock & Poultry Farmers. A study by the GAO[7] concluded that higher corn prices generated by ethanol hurts livestock and poultry producers because the cost of feed stock increases (70% of corn grain is fed to livestock and poultry in the U.S.). The National Center for Policy Analysis estimates that ethanol production adds $1 billion annually to the cost of beef production.[8]
• Increases Food Prices. By increasing the cost of feed stock for livestock and poultry producers, ethanol production increases the price to consumers for meat, milk and eggs. According to the Congressional Budget Office, from April 2007 -2008 food prices increased 15% due to the ethanol mandate.[9]
• Doesn’t Create Net New Jobs. The employment effects of ethanol are a wash because, as shown by economist Ralph Brown[10], ethanol production lowers gas tax receipts – reducing jobs in highway construction and maintenance and in sectors adversely affected by higher corn prices. Ethanol doesn’t create net new employment, it simply shifts employment from one sector to another.
• Won’t Improve Energy Security. The notion that more ethanol use will promote energy independence and security is a fantasy. Ethanol can never realistically become a large enough share of our energy to make a difference. Even if we increased ethanol production by 1000 percent it would only account for one percent of total energy consumption in the U.S. according to University of South Dakota agricultural economist Ralph Brown. If all cars in the U.S. were fueled with 100 percent ethanol, corn production would cover 97 percent of U.S. land area.[11] In addition, reducing our oil imports will not reduce our vulnerability to oil price swings because oil prices are set in the world market, not domestically.
And the list goes on and on. The more you read about ethanol, the more you can agree with the statement by the president of the Agribusiness Council, Nicholas Hollis, that “Ethanol is the largest scam in our nation’s history.”
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