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Ethanol Industry Is Its Own Worst Enemy

March 28, 2009

On March 26, 2009, I testified before the Oregon Legislature on four ethanol related bills.  Another person testified that government has been giving taxpayer money to the ethanol industry for more than 20 years and the only result is the proof that the ethanol industry couldn’t survive without subsidies.  There were several ethanol industry representatives there begging for Oregon to stay the course with its mandatory E10 law, and even embrace the coming E15 waiver that is before the EPA so that the ethanol industry in Oregon could continue to “prosper”.  Of course they didn’t mention that the biggest ethanol plant west of the Rockies, the Cascade Grain Products 113 MGY plant in Clatskenie, OR was in Chapter 11 proceedings with a plant that never worked reliably in the 6 months it was in business.  And most interestingly they didn’t mention that even if Oregon repealed its ethanol mandate, nothing would change, because the federal RFS mandate, EISA 2007, is driving all ethanol blending in the country and there would be no reason for the gasoline distributors to change their blending habits in Oregon.  Why would they?  They are taking the federal blending tax credit to help pay for the infrastructure that they were forced to install by the state and they just pass along the higher cost of ethanol, now that it costs more than gasoline.  Oregon has the highest average gas price in the Northwest.  Plus, nobody mentions that the gasoline refiners are shipping “sub-octane” blending product into Oregon because all of our gasoline is E10, thus saving them production cost.  They are not interested in changing this gold mine, especially when so many cars get much worse mileage on E10.  Nobody knows if the gasoline producers are actually selling more gasoline now than before the mandatory E10 law went into effect.  The science has never been done.

But the stupidest thing that the Ethanol industry does is to completely ignore the property damage that ethanol blended gasoline does.  More than 80% of the public testimony was about the problems that E10 is causing to average citizens in Oregon every day.  You would think that the ethanol and gasoline distributors would want to avoid negative publicity and lawsuits.  But apparently that is just “the cost of doing business.”  The most telling testimony was from one of the representatives on the committee who said that her husband traveled some distance over to Washington to get ethanol free gasoline for his boat.

I wonder what it is going to take to get the ethanol lobby to recognize that they should only be selling their product to modern, computerized fuel injected cars.  By insuring that ethanol free fuel is universally available to everyone who really needs to have it they could save themselves a lot of grief.  If all premium unleaded gasoline was ethanol free, that would make it possible for those who need it to survive.  And lest you think this isn’t a serious problem, businesses are being ruined by the unintended consequences of EISA 2007.

I also wonder when we are going to read the first article where a generator or pump or portable power tool stopped working during an emergency because of ethanol, with serious consequences.  It is going to happen.  But it doesn’t have too if only the ethanol and gasoline industry would do the ethical thing and insure that all premium unleaded fuel was ethanol free.

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