By: Jonathan Klein
With the national price of gas now averaging almost $4 a gallon, the top news headlines should be dominated by Governor Romney’s aggressive attacks on President Obama’s failed energy policies.
Instead, silence. This isn’t another story about how the mainstream media is ignoring the gas crisis to aid President Obama’s re-election efforts. This story is about why both sides neglect the present-day gas crises, instead preferring to talk in vague terms about America’s long-term energy prospects.
In the short term, many folks understand that a complex interaction of factors ultimately impacts gas prices, most notably crude production, Middle Eastern stability, and global economic trends. As the blowback over Newt Gingrich’s sub-$2.50 gas claim revealed, U.S. policymakers ultimately have minimal influence on the factors driving gas prices.
That’s not to say policymakers have no influence, though. As an increasing number of lawmakers on both sides of the aisle agree, ethanol policy — established by Congress and now enforced mostly through the EPA’s “Renewable Fuel Standards” — contributes in a real way to Americans’ pain at the pump. The RFS mandate requires fuel producers to blend 13.2 billion gallons of corn ethanol this year, gradually rising to 15 billion gallons annually by 2022.
There are a lot of reasons to do away with the ethanol mandate. The science tends to show that ethanol-based fuel reduces efficiency. Ethanol damages engines, especially in older-model cars, boats, and lawnmowers and other yard equipment. Whether ethanol actually reduces CO emissions is questionable. With much of the South and Midwest facing severe droughts, the mandate raises food prices by forcing fuel producers to compete with ranchers for limited corn crops. From a historical perspective, it’s challenging to find examples of societies that have voluntarily burned a valuable food source.
Despite calls from lawmakers as diverse as conservative Sen. Tom Coburn (R-OK) and liberal Democrat Sen. Dianne Feinstein (D-CA) to stop ethanol subsidies and cut back on the mandate, the powerful biofuels and agricultural lobbies have thus far dominated the discussion. Through a series of mental contortions, the biofuels lobby argues its policies actually reduce gas prices, ignoring evidence that its product demonstrably hurts consumers’ fuel efficiency in the long run.
Still, it’s inconvenient for either party to talk about getting rid of ethanol, despite conservatives’ inclination to cut government regulation or liberals’ desire to protect the environment. Talking ethanol puts incumbents on both sides of the aisle in the uncomfortable position of supporting biofuels handouts, despite a large (and mounting) body of evidence to suggest ethanol has been a failure. Given the optics of that message, it’s no surprise biofuels and agriculture-oriented PACs must cough up lots of money every cycle to protect ethanol subsidies and the RFS mandate. Just this cycle, Archer Daniels Midland, one of the nation’s largest corn growers, donated at least a quarter-million dollars to both Republicans and Democrats. At least 150 other growers and growers’ associations used their own PACs to support the most vocal proponents of ethanol.
Even as gas prices go up, it’s not likely that the ethanol lobby will go away. Just recently, the Renewable Fuels PAC was launched, presumably to further protect those candidates who support the corn lobby’s failed “energy policy.”
