It was a very different world when the idea of turning food into fuel might have seemed sensible. Truth is, it never made sense, except to those who hoodwinked Congress into passing a Renewable Fuel Standard that would pay off big for ethanol producers. Without question, that whole concept has clearly outlived its usefulness.
That’s why the marine industry and our customers should be cheering the NMMA’s announcement Tuesday that it is continuing the fight to stop E15 from hitting the market and destroying marine engines and other engines. Joining others in an Engine Products Group, the NMMA is petitioning the U.S. Supreme Court to review the DC Circuit Court of Appeals’ August 2012 dismissal of our challenge to the EPA’s partial waiver approving E15. It was the second time the Court had done so.
However, forcing our industry to seek a Supreme Court review shouldn’t be necessary. What’s needed is for the EPA and Congress to move into today’s world. The outdated federal energy policy that is requiring oil refiners to buy more and more corn-based ethanol (13.8 billion gallons this year, 36 billion gallons by 2022) is a textbook boondoggle. The fuel standard needs to be repealed now. Here’s why:
• The standard grossly overestimated the amount of gas the nation would burn because it was looking at a time that no longer exists. For example, it didn’t take into account millions driving cars with much higher fuel economy standards and it didn’t foresee the Great Recession. It has cut U.S. gasoline demand down to 8.7 million barrels of oil per day. That’s already back to the 2001 level and will likely continue on a downward trajectory.
• The fuel standard didn’t account for higher gas prices resulting in gas-saving changes to our driving habits. While gas usage has dropped, complaints about the price at the pump have not. Some reports predict prices will moderate a bit, but not by much because oil is a major player on the world economic stage. The elephant in the room is China, which now tops us as the largest oil importer at 10.2 million barrels per day. Simply put, that’s what will impact prices and anyone who thinks more ethanol will hold down prices should be sent out for a urine test.
• Congress really blew it in failing to see that emerging technology would result in domestic oil production soaring at levels apparently unthinkable when the fuel standard was passed in 2005. The argument that ethanol will reduce our dependence on Middle East oil gets weaker by the barrel. It’s now all about domestic oil production, up a record 14 percent last year to 6.5 million barrels per day. The U.S. is even forecast to overtake Saudi Arabia by 2020 as the world’s largest oil producer. Moreover, in 2011 the U.S. became a net exporter of fuels for the first time in 60 years. The biggest importers of U.S. fuels are Mexico, Canada, Brazil and the Netherlands.
• Congress was sucked in by the claim that ethanol was good for the environment and good for consumers — both statements are false. Ethanol consumes more energy to produce than it delivers. As a fuel source, corn ethanol is far less efficient than gasoline, providing 27 percent lower fuel economy than gas. Environmental experts have determined that ethanol results in more carbon dioxide into the atmosphere. The National Research Council has found it requires significantly more water in its production process than gasoline. It has increased the use of fertilizers and pesticides in the rush to grow corn that depletes water and soil quality. Currently, a whopping 40 percent of the U.S. corn crop is being turned into ethanol, causing retail food prices to rise. If we continue on course to produce 36 billion gallons by 2022, we will have to use 100 percent of our corn crop. How does any of this benefit the consumer or the environment?
Fortunately, the NMMA isn’t just looking to the Supreme Court for solutions. The real solution to this problem rests with Congress reconsidering the dilemma it created. To that end, bills are already in and more are expected. But they will have to be pushed hard. The arguments for major changes in the fuel standard are persuasive to be sure, but let’s remember that we’re talking about Congress.
Still, one thing is certain. Revising the fuel standard will be center stage when the American Boating Congress takes place May 8-9 in Washington. So let the push begin. ABC will be a golden opportunity to present the arguments face-to-face to members of Congress.