Tuesday, February 24, 2004

Ethanol Double-Dipping
The Department of Transportation this week announced that it would extend the benefit for so-called dual fuel cars. Under this program, carmakers get credit against their Corporate Average Fuel Economy targets (see last Friday's blog) for producing cars that are theoretically capable of running either on gasoline or a mostly-ethanol fuel blend. (You may have seen the little "FFV" logo with its green leaf on rental cars such as the Ford Taurus; it stands for Flexible Fuel Vehicle, qualified under the rule in question.) Only a tiny fraction of these cars ever actually run on ethanol.

This regulation adds insult to real injury. It is not enough that taxpayers massively subsidize the production of ethanol, which consumes, rather than saves fossil fuels in its manufacture (see my blog of 1/19/04). It is not enough that we force refiners to add ethanol--with little or no benefit for reducing air pollution--to reformulated gasoline by phasing out its only competitor, MTBE. In addition we must provide carmakers with another loophole in the CAFE standards through which tens of millions of SUVs have already driven, thereby further undermining whatever value this program is intended to have.

At a time when the nation is focused on the trial of Martha Stewart for stock fraud and clamoring for investigations into Halliburton's alleged overcharging on government contracts, isn't it high time for an independent investigation into the decades of intense lobbying that have made ethanol so unassailable--a virtual third rail in Congress--and perpetuated this extravagantly expensive and useless "energy" program, which costs more than $1 billion/year in direct subsidies and foregone federal fuel excise taxes and state highway taxes?

If this sounds strident, just consider how difficult it has been to get any kind of energy legislation passed, despite self-evident needs for improvements to our electric and natural gas infrastructure, and streamlining of access to the reserves of clean natural gas so necessary to reduce the consumption of more polluting fuels. All the while, ethanol masquerades as a bulwark of energy security, creating the false impression that at least something is being done to make us less reliant on imported energy.

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