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WALL STREET JOURNAL EDITORIAL BOARD OP-ED: BIG ETHANOL VS. ELECTRIC VEHICLES
Jun. 26, 2023
by the Wall Street Journal Editorial Board
One of the more entertaining spectacles in Washington these days is the industrial-policy competition between the climate and ethanol lobbies. The Biden Administration this week handed both sides a victory, yet as usual neither is satisfied.
The Environmental Protection Agency on Wednesday finalized its long-awaited renewable fuel standards for 2023 to 2025. The standards dictate how much ethanol and other so-called biofuels must be blended into the nation's fuel supply. Refiners have to buy credits if they don't meet quotas, which raises the price of gasoline.
Corn farmers, ethanol producers and Iowa politicians are irate becausethe EPA didn't increase the mandated volume for conventional renewable fuels. "The rule is totally inconsistent with this administration's climate agenda because everybody knows that both biodiesel and ethanol is environmentally positive," Iowa Sen. Chuck Grassley said.
Actually, the ethanol mandate increases CO2 emissions as more land is diverted to growing crops for fuel. A study last year in the Proceedings of the National Academy of Sciences noted that the renewable fuel standard has led to "substantially greater GHG emissions" and "exacerbated other environmental problems," including poor water quality and soil erosion.
But climate isn't why the EPA decided not to increase the ethanol mandate. Instead, EPA says projected gasoline demand is not expected "to recover to pre-pandemic levels, and moreover is expected to be lower by 2025 than it was in 2022." Lower gasoline consumption limits the amount of ethanol that can feasibly be blended into the fuel supply.
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