Recently, ActionAid USA and CEI filed a correction request under the Data Quality Act targeting misleading claims made by the EPA regarding the effects of ethanol mandates and subsidies, claims that have obscured how government policies have contributed to world hunger, malnutrition, disease, and death. This legal request, which was filed shortly before World Food Day, can be found here.
According to one recent study, ethanol diversion to fuel has caused nearly 200,000 excess deaths annually. Marie Brill, Senior Policy Analyst at ActionAid USA, stated: “High and volatile prices are already causing misery. The real price of a typical global food basket is up nearly 50% over the last year. With poor people in developing countries spending between 50-80% of their income on food, it is no surprise that 44 million people fell into extreme poverty from June 2010-February 2011 because of high food prices. The big surprise is that the EPA still fails to acknowledge the human impact of the Renewable Fuel Standard and still refuses to cite the plethora of reports that reveal the significant role of biofuels in global food price volatility.” According to Sam Kazman, CEI general counsel: “EPA’s refusal to address this issue has gone on long enough, and there isn’t a more appropriate time for the agency to change its approach than in the wake of World Food Day.”
The inestimable Indur Goklany has an important new report on biofuels and developing countries. “Could Biofuel Policies Increase Death and Disease in Developing Countries?” appears in the Spring 2011 issue of the Journal of American Physicians and Surgeons. In his analysis, Goklany concludes that biofuels production “may have led to at least 192,000 additional deaths and 6.7 million additional lost DALYS [Disability Adjusted Life Years] in 2010.” He points out that those estimates may be low:
These estimates are conservative.
First, they exclude consideration of a number of health risks that are, in fact, directly related to poverty (e.g., indoor smoke from burning coal, wood and dung indoors; and iron deficiency). Second, the analysis only considered the poverty effects of biofuel production over and above the 2004 level; therefore, it does not provide a full estimate of the effect of all biofuel production. Despite the underestimations, these estimates exceed the WHO’s estimates of the toll of death and disease for global warming. Thus, policies to stimulate biofuel production, in part to reduce the alleged impacts of global warming on public health, particularly in developing countries, may actually have increased death and disease globally.
CEI has long warned of the human, land, and environmental problems with ethanol mandates, incentives and other subsidies for biofuel production. See here and here and here (which includes discussions relating to the politics of ethanol).
Sens. Amy Klobuchar (D-Minn.) and Tim Johnson (D-S.D.) introduced legislation last week to provide more support to the biofuel industry. This would counter a number of bills introduced recently intending curb biofuel incentives (here, here). Fortunately, support for this kind of bill does not seem to be in the pipeline, so it must mostly be for show.
The “Securing America’s Future with Energy and Sustainable Technologies Act” (SAFEST) is bold. Rather than picking one or two things the ethanol industry was interested in, it throws them everything they’ve ever dreamed of.
Let’s look at a few provisions:
It amends the definition of “advanced biofuel” to include corn starch-derived ethanol.
This would allow the corn ethanol industry access to a much larger share of the Renewable Fuel Standard, which is scheduled to increase from 9 billion gallons to 32 billion gallons by 2022. This would be one of the more damaging aspects of the legislation.
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Via The Hill’s Energy blog:
“The ethanol tax credit is bad economic policy, bad energy policy and bad environmental policy. The $6 billion we waste every year on corporate welfare should instead stay in taxpayers’ pockets where it can be used to spur innovation, stimulate growth and create jobs,” Coburn said in a statement Wednesday.
The bill would repeal the VEETC. As before, a broad coalition emerged in support of the legislation.
CEI’s Marlo Lewis commented on the idea that ethanol is an infant fuel that needs protection:
Henry Ford built his first car, the Quadricycle, to run on pure ethanol. That was in 1896. In 1908, Ford built the first flexible fuel vehicle capable of running on either gasoline or ethanol. Today, more than a hundred years later, the perennial infant known as the corn-ethanol industry still can’t ‘compete’ without government coddling. We commend Senators Cardin and Coburn for challenging Congress to stop throwing good money after bad.
The Wall Street Journal interviewed Secretary of Agriculture Tom Vilsack who suggested the ethanol industry might be able to wean itself off of federal subsidies. Not too quickly, obviously.
The WSJ took this as a positive sign:
Still, Mr. Vilsack may be the first Agriculture Secretary in generations to concede that ethanol subsidies are not immutable. That’s progress.
I do not share their view that this is progress. As they admit, there’s a chance the industry will receive new forms of support without ditching the old. Obama will still have a potentially tough re-election in 2012. Virtually all of the potential Republican candidates have praised the industry, and Obama will certainly acquiesce and do the same.
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During the annual National Ethanol Conference, where ethanol rent-seekers enthusiasts from around the country gather to discuss achievement of the still-out-of-reach goal of making significant amounts of ethanol commercially viable. It’s always just a few years away.
Very early that morning, the House voted to de-fund EPA’s program to implement E15 throughout the country as well as funding for the installation of blender pumps. Growth Energy responded, “OPEC Wins, America Loses in House Vote.” Explaining his amendment, Jeff Flakes stated: “I’ve long thought that the ethanol industry should be able to stand on its own — not be propped up by federal subsidies.”
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This might make things interesting, as the past few years have demonstrated the extent to which certain aspects of G.M. have clout in Washington: Automakers want House to block 15 percent ethanol blend. Also consider the obvious irony of a partially government-funded/owned company opposing policy supported by the Obama administration — the “slam on the breaks while hitting the gas approach.”
The Big 3 hadn’t been too loud on this issue, though they did join a lawsuit attempting to prevent EPA from approving the fuel late last year. Representative Sullivan (R-OK), as previously mentioned here, has introduced an amendment (of which there are almost 600 introduced amendments) to be attached to the CR which would de-fund EPA’s ability to introduce E15.
Much like the strange bedfellows who opposed the extension of the VEETC last year, the article notes:
“Our organizations rarely agree on any public policy issue, but we are united in opposing the premature introduction of E15,” said the letter that was also signed by the American Bakers Association; American Meat Institute; American Petroleum Institute; National Petrochemical & Refiners Association; National Turkey Federation; Outdoor Power Equipment Institute; and Specialty Equipment Market Association.
While testing done on vehicles from MY 2001-present have been confirmed by the EPA as able to handle blends of E15, a positive conclusion has not been reached for a number of other engine types (motorboat, lawnmower, etc.). Some manufacturers of non-automobile engines have stated they already struggle with E10, which is commonly sold throughout the United States, and are very concerned with the declining availability of gasoline without ethanol in it as well as increased damage by misfueling.
It’s hard to tell who would support this amendment. Most Congressman don’t consider ethanol to be a big issue, and the farm-belt will stand behind it. Many Democrats don’t support the extension of ethanol policy but might see this issue framed as an attack on the EPA which they would feel inclined to defend.
Two bills have recently been introduced that intend to block efforts made to increase U.S. consumption of ethanol.
The first, from Rep. John Sullivan (R-OK), intends to cut funding for EPA’s E15 program. My understanding of the legislation is that “cutting funding” for the program is the equivalent of ending it, as the EPA needs funds to carry out the remainder of the regulatory process (permits, guidelines for fueling stations, E15 warning stickers, etc.).
The second is from Jeff Flake (R-AZ), would end the VEETC and corresponding tariff on foreign ethanol.
Both bills would slightly limit the excessive production of corn ethanol (a good thing), but the bigger problem is the ever-increasing mandate known as the Renewable Fuel Standard. An ideal bill would end the mandate, tax credit, tariff, end the law that allows E-85 vehicles to qualify for mileage standards, and end EPA’s ability to regulate the amount of ethanol in our fuel. Then the ethanol industry couldn’t fairly argue that they’re being denied access to the market. Some energy analysts even believe E85 could exist profitably as a niche industry in the mid-west.
Realistically, in the short run, petroleum would still dominate. However, freeing capital away from politically motivated ends makes it more likely that capital will flow into areas that will actually generate benefits for consumers. It is unclear if that will ever happen with corn ethanol and/or its variants (cellulosic, biodiesel, etc.).
Here is a good piece (and a challenge) by Tim Carney on the ethanol’s industry claim that they’re being unfairly denied access to the fuel market by the EPA. Of course, the ethanol industry is being incredibly disingenuous in its calls for fair competition. They have done this before.
Recently, Egypt’s pro-American dictator, Hosni Mubarak, was forced to resign after 30 years in power, and forced to give way to a military-controlled government. Victor Davis Hanson has some interesting reflections on the revolution in Egypt at this link.
Earlier, we discussed the role of ethanol subsidies and biofuel mandates in increasing support for the Muslim Brotherhood, an anti-American group opposed to Mubarak, at this link. By indirectly increasing wheat prices, ethanol subsidies drove up unrest in Cairo’s slums, which are more supportive of the Muslim Brotherhood than they are of Egypt’s historically much smaller pro-western democracy movements. (Egyptians historically have spent nearly half their income just on food — more than that in the slums of Cairo and Alexandria, Egypt’s largest cities).
The Washington Post‘s editorial board and various columns in the Post, like one by Professor Tim Searchinger, agreed about the folly of ethanol subsidies and their role in contributing to misery and unrest among Egypt’s poorest.
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