OUR VIEW: Ethanol supports may have outlived usefulness

Times change. Circumstances change. Laws should change, too. That formula led to the end of the ban on oil exports last year, once Congress realized that the 40-year-old law had started doing more harm than good.
Now, the same process may be unfolding with America's various supports for the ethanol industry. Congress should take a fresh look. Taxpayers started supporting ethanol production in the 1980s, in part for the same reason that oil exports had been banned: energy independence. Not only should America keep its domestic oil in-house, but also fuel production should be supplemented by the nation's staggering corn bounty, the thinking went. But events have changed this calculation, and in the same way as they altered the thinking about the oil export ban. What happened is that crude oil production soared in North Dakota and elsewhere around the United States. More domestic oil production means less need to import foreign oil-and it also means less need to boost volume by adding ethanol. So, an early reason for subsidizing ethanol production now is less compelling than it used to be. The "green" or environmental effect of ethanol production is a more recent reason. But the shade of that green and even whether it's green at all seems in dispute. Demand for ethanol drives up the Midwestern acreage devoted to producing crops. That's one reason why fewer acres are being set aside in the Conservation Reserve Program, the area of which has fallen from 32 million acres in 1992 to around 25 million acres in 2016. More cropland also means more runoff pollution winding up in the Mississippi River and Gulf of Mexico. It's one thing when that happens as a result of producing food, but it's another when the policy goal supposedly is to improve the environment. As for ethanol supporters' claim that mandating ethanol/gasoline blends lowers greenhouse gas emissions, "the scientific jury is still out on whether requirements to blend ethanol with gasoline lead to the lower carbon emissions that Congress intended when it made those requirements law," FactCheck.org concluded in October. Among the reasons for skepticism: a National Research Council study in 2011, which declared that "according to the Environmental Protection Agency's own estimates, corn-grain ethanol produced in 2011 ... is a higher emitter of GHG than gasoline." But there's no doubt about ethanol's positive effect on rural Midwestern economies. Or is there? In Iowa, the winner of the recent Republican caucuses was not ethanol booster Donald Trump, but ethanol critic Ted Cruz. As an Iowa State University economist told the Des Moines Register, "This was the last chance for the domestic ethanol interests to assert themselves in a place where they had had extraordinary success (in the past), and it didn't quite work." If even Iowans are changing their minds on ethanol, a new day has dawned. The feds should consider easing the ethanol-blend mandates for gasoline and seeing whether the industry can stand on its own feet. -- Tom Dennis for the HeraldTimes change. Circumstances change.Laws should change, too.That formula led to the end of the ban on oil exports last year, once Congress realized that the 40-year-old law had started doing more harm than good.
Now, the same process may be unfolding with America's various supports for the ethanol industry. Congress should take a fresh look.Taxpayers started supporting ethanol production in the 1980s, in part for the same reason that oil exports had been banned: energy independence. Not only should America keep its domestic oil in-house, but also fuel production should be supplemented by the nation's staggering corn bounty, the thinking went.But events have changed this calculation, and in the same way as they altered the thinking about the oil export ban. What happened is that crude oil production soared in North Dakota and elsewhere around the United States. More domestic oil production means less need to import foreign oil-and it also means less need to boost volume by adding ethanol.So, an early reason for subsidizing ethanol production now is less compelling than it used to be.The "green" or environmental effect of ethanol production is a more recent reason. But the shade of that green and even whether it's green at all seems in dispute.Demand for ethanol drives up the Midwestern acreage devoted to producing crops. That's one reason why fewer acres are being set aside in the Conservation Reserve Program, the area of which has fallen from 32 million acres in 1992 to around 25 million acres in 2016.More cropland also means more runoff pollution winding up in the Mississippi River and Gulf of Mexico. It's one thing when that happens as a result of producing food, but it's another when the policy goal supposedly is to improve the environment.As for ethanol supporters' claim that mandating ethanol/gasoline blends lowers greenhouse gas emissions, "the scientific jury is still out on whether requirements to blend ethanol with gasoline lead to the lower carbon emissions that Congress intended when it made those requirements law," FactCheck.org concluded in October.Among the reasons for skepticism: a National Research Council study in 2011, which declared that "according to the Environmental Protection Agency's own estimates, corn-grain ethanol produced in 2011 ... is a higher emitter of GHG than gasoline."But there's no doubt about ethanol's positive effect on rural Midwestern economies. Or is there? In Iowa, the winner of the recent Republican caucuses was not ethanol booster Donald Trump, but ethanol critic Ted Cruz.As an Iowa State University economist told the Des Moines Register, "This was the last chance for the domestic ethanol interests to assert themselves in a place where they had had extraordinary success (in the past), and it didn't quite work."If even Iowans are changing their minds on ethanol, a new day has dawned. The feds should consider easing the ethanol-blend mandates for gasoline and seeing whether the industry can stand on its own feet.-- Tom Dennis for the Herald