Big Ethanol Hopes You're a Dope

Nearly everything Growth Energy says is misleading, incomplete, or outright false.

  

POLICY ANALYSIS                                   

Growth Energy recently unveiled a national ad campaign to tell “the truth about ethanol” and the Renewable Fuel Standard (RFS), the federal mandate that requires oil refiners to blend ethanol into gasoline. But as an Institute for Energy Research (IER) fact check reveals, the ethanol lobby has a curious definition of “truth,” as many of their claims are incomplete, misleading, or outright false. IER’s findings include: Growth Energy claims that “ethanol reduces the price of gasoline,” but the opposite is true. Ethanol contains about 33 percent less energy than gasoline, which means ethanol reduces fuel economy. A year ago, regular gasoline cost about 70 cents less than E85 on a miles-per gallon basis, according to AAA. Even with a record harvest driving down corn prices, E85 still costs about 20 cents more than conventional gasoline. Ethanol is not nearly as “good for the environment” as Growth Energy claims. A study in Science finds that corn-based ethanol nearly doubles greenhouse gas emissions over the next three decades and continues to increase emissions for the next 167 years. A Stanford engineer finds that burning some ethanol adds 22 percent more hydrocarbons to the atmosphere than burning conventional gasoline. Growth Energy argues that higher ethanol blends won’t damage automobiles, but this is false. One study finds that 5 million cars could experience engine damage or failure from E15 use. AAA has called for a suspension of E15 sales, citing potential for consumer confusion and voided warranties. Moreover, boating groups oppose gasoline blended with more than 10 percent ethanol because ethanol damages boats and other small engines. The shale revolution, not ethanol as Growth Energy claims, is the driving force behind America’s declining oil imports. U.S. liquid fuels production rose 39 percent from 2005 to 2012, according to EIA. Biofuels accounted for 32 percent of the increase, while petroleum contributed about 68 percent. Growth Energy falsely asserts that “the ethanol industry does not receive federal subsidies.” Though it expired at the end of 2011, the ethanol tax credit was worth $6.5 billion in FY 2011 and $3.6 billion for the three months it was available in FY 2012. That’s more than twice as much as oil and natural gas subsidies were worth over 91 years. In addition, the RFS enriches the ethanol industry with an even more generous handout: guaranteed market share. The RFS hurts Americans by requiring fuels that contain exorbitant amounts of a product that damages engines, reduces fuel economy, and increases greenhouse gas emissions. Meanwhile, the federal government has replaced the ethanol tax credit with an even more attractive subsidy for the ethanol industry: repeat customers and guaranteed demand. It is time for Congress to repeal this harmful federal mandate. To read the full analysis, click here. ###