Friday, February 10, 2006

Ethanol Mandate Madness


Our elected State Officials are very close to imposing an Ethanol Mandate on all gasoline sold in Wisconsin. The Wisconsin Legislative Reference Bureau has links to resources about this issue. There is still some time to consider the wisdom government interference with normal free market activity.
Wisconsin Farm Bureau Federation: ETHANOL needs to be a renewable fuel choice in Wisconsin. Assembly Bill B15 and Senate Bill 15 would provide a choice for ethanol fuel in Wisconsin by requiring fuel with 87 octane rating to contain at least 10 percent ethanol. Contact your legislators today and ask them to co-sponsor AB15 and SB15.
If ethanol “needs to be a renewable fuel choice” as the Farm Bureau claims, then I have no problem with allowing consumers a choice. It is Orwellian doublespeak, however, to then say you want to achieve choice “by requiring fuel with 87 octane rating to contain at least 10 percent ethanol”. An ethanol mandate is the exact opposite of consumer choice.

Mandatory means you are not free to behave differently from the government command. Mandatory means actions of the private sector must conform to government plans and control over the economy. Obedience is compulsory and obligatory in order to avoid punishment. Any Republican claiming to believe in individual liberty, economic opportunity and the superior results from regulated free markets, who votes for this mandate is a hypocrite of the first order.

Ethanol production is an established industry and a number of Wisconsin Ethanol Plants are operational. The industry does not require a government guaranteed market. The sales pitch for taking away market freedom and consumer choice is entirely built upon the valid fears of reliable oil supplies and fantasy notions that mineral hydrocarbon energy sources are undesirable relative to organic hydrocarbon energy sources.
Winners and Losers of Ethanol Mandates This study was sponsored by the American Petroleum Institute, although the views expressed herein are strictly those of the authors. In virtually no instance is there evidence that ethanol will improve US energy security, regardless of the theory or challenge being considered. Even the largest ethanol mandate considered here (8 billion gallons by 2012) displaces an insignificant volume of imported crude oil.
Even if every single environmental benefit claimed for ethanol is true, the volume of transportation fuel consumed in American far exceeds even the hypothetical production capacity of the industry. There are persistent disagreements about how much petrochemical material is required to produce a fixed unit of ethanol, but is clear that ethanol from crop production depends on oil based fertilizers, plus gas or diesel powered farm and transport equipment.

A California Assessment done back in 1999 discusses the fact that ethanol can not be transported by pipelines like the current oil and natural gas system. This means industrial ethanol production must be moved by trains, trucks or boats. The additional fuel cost for ethanol transport, plus the increased traffic and road load required to ship ethanol is not discussed much by the mandate proponents, but the industry website confirms the transport facts.
Transportation of Ethanol Most ethanol, about 75%, is transported by rail. Trucks are used to transport small quantities of ethanol shorter distances, and barges ship larger quantities longer distances. Rail is an efficient, reliable way to transport ethanol from the Corn Belt to its markets, often on the East or West Coast. From the time ethanol is produced, it can be at its market within a few days' or a week's time.
I also find it amusing that the environmentalist movement with their irrational hatred of carbon dioxide are granting a pass on these types of mandates.
Badger State Ethanol CO2 Production: Each year, Badger State Ethanol is capable of supplying over 140,000 tons of raw carbon dioxide gas via pipeline to a CO2 processing facility located adjacent to our ethanol plant.
Ethanol will not insure an adequate transportation fuel supply. Ethanol will not replace American foreign oil purchases. Ethanol will not save the planet, even if we assume the planet needs saving. If Senate Bill 15 passes and Governor Doyle signs away consumer choice and ends a competitive free market in Wisconsin, it will simply be big money politics as usual. Perhaps it’s time to buy some ADM.