Statist Economics At Work: The Colossal Waste Of George Bush’s Mandatory Ethanol Standard

The federal government’s mandate to require Americans to use expensive, inefficient biofuels is so broken and dysfunctional it can’t even decide the ideal target amount of production.

On Friday, the Environmental Protection Agency again announced that it would not determine the amount of ethanol and biofuels required to be mixed into every American’s fuel tank for 2014 by the Energy Independence and Security Act. In 2005, Congress mandated that alternative fuels, primarily corn-based ethanol, progressively be added to gasoline and diesel and that the EPA annually adjust the targets originally set by Congress as needed. Now that 2014 is almost over, the EPA has failed again to clarify the standards. Friday’s non-decision should remind us again of some of the reasons why it’s high time Congress repeal what some have accurately labeled a “Soviet-style production quota system” for the nation’s fuel supply.

1. The Renewable Fuel Standard hurts drivers, eaters, taxpayers and the environment. Because of the RFS, Americans have to pay more for fuel than they normally would without the mandate, and the fuel they put in their tanks is less energy efficient because ethanol isn’t as energy dense. Further, the increased demand for corn for use in ethanol increases the price of corn by as much as 68 percent, which affects not only Americans but the world, because corn is a staple food in many countries as well as a staple feed for livestock. In addition, ethanol has proven to be harmful to smaller engines.

Though environmental organizations initially supported the mandate to reduce oil use and greenhouse gas emissions, many now argue that the ethanol mandate is poor environmental policy. When radical environmentalists and free-market groups, the UN, motorcyclists, ranchers, anti-poverty groups, restaurants and others agree on something, maybe it’s time to listen.

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