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Whose Freedom is Growth Energy Fueling?

Tuesday, January 18, 2011

By Sheila Karpf, Environmental Working Group Senior Analyst

A group of corn ethanol producers is mounting an aggressive campaign they call their “Fueling Freedom Plan” that would have taxpayers spend scarce resources on biofuels pipelines, gas station pumps and other infrastructure development in order to put ethanol on “a level playing field” with gasoline – and into the tank of every engine in America.

An ethanol lobbying group, Growth Energy, devised this proposal when it became clear that Congress would not extend the $6 billion-a-year taxpayer-funded tax credit that oil companies receive to blend ethanol with gasoline. Growth Energy also wants to require carmakers to sell only flexible fuel vehicles that can run on gas blends that contain more than 10 percent ethanol.

The result, Growth Energy claims, would be a “genuinely free market … that is free of government supports.”

Really? It looks to us at the Environmental Working Group like their plan means freedom for ethanol producers to make a tidy profit while locking the rest us into a system of liquid-fueled vehicles that run on environmentally-unfriendly fuel. It also slams the door on electric and hybrid vehicles and other alternatives and more environmentally friendly transportation.

Last but not least, it’s a slick move to try to sidestep the anti-spending fervor that has gripped Congress. Spending federal funds on loan guarantees for an ethanol pipeline (which the Department of Energy has estimated will cost $4.5 million per mile) and tax credits for blender pumps only shifts the way taxpayers’ money supports their anti-free market policy. Any economist would tell them that a “free and open market” does not equate with subsidizing infrastructure for a single segment of industry.

Some members of Congress, however, have begun to wake up to the implications of making ethanol, with its false promise of energy independence, a permanent fixture of America’s fuel cocktail.

Most recently, Sens. James Inhofe (R-Okla.) and Olympia Snowe (R-Maine) sent a letter to the Environmental Protection Agency pointing out that older vehicles and hundreds of millions of small engines – in lawnmowers, snowmobiles, outboards, chain saws and more – are doomed to severe damage or complete failure if their owners can no longer find pure gasoline – with no ethanol at all.

Inhofe and Snowe were responding to EPA’s decision to grant Growth Energy’s wish to sell gasoline containing up to 15 percent ethanol (E15), which came with no assurance that gasoline without ethanol will still be available.

How did Growth Energy respond to the senators’ challenge? Its spokesman, Chris Thorne, asked: “Exactly how many engines are at stake here? How much gasoline do they consume compared to the total amount of fuel consumed? If I get two gallons of gasoline a year for my lawnmower, that's a lot. But that should prevent me from putting E15 into my car, that I put 40 gallons a week into?”

Answering Thorne’s first question, Kris Kiser of the Outdoor Power Equipment Institute estimated that there are 200 million pieces of outdoor power equipment in use today – a major investment by homeowners, farmers, ranchers, small and large businesses and others.

These include equipment used daily by Growth Energy’s own constituency of corn farmers and ethanol plant employees:  engines in old trucks, chainsaws, generators, lawnmowers, weed trimmers, forklifts, four-wheelers (ATVs), water and fertilizer tanks, boats, etc. To argue that these engines are of no concern because they account for a small portion of overall fuel demand is incomprehensible and naive.

EWG has previously questioned the health, environmental, performance and safety problems of higher ethanol blends. The consequences of higher ethanol use include higher nitrous oxide and hydrocarbon emissions, lower gas mileage, more corroded engine parts and fuel tanks, and higher rates of an engine stalling, misfiring and overheating.

Others have joined in. Oil companies are not about to offer warranties and liability protection for engines running on E15, so leading refiners such as Valero Energy, Marathon Oil and Tesoro have said they will not offer it. And not one carmaker has signalled that its warranties will cover cars using E15. In fact, the Alliance of Automobile Manufacturers (AAM), representing 12 major companies including Ford, General Motors and Chrysler, filed suit against EPA over the decision to allow E15 in certain model year vehicles.

Even the Coast Guard is opposed to higher ethanol blends for fear that its boat engines will fail at sea, a clear danger to its crews.

But Growth Energy’s ambitions are boundless. Their website envisions a time in the not-so-distant future when U.S. ethanol production would total 140 billion gallons a year and replace 90 percent of all gasoline. To reach this level, the U.S. would have to grow four times its current corn crop and direct every single bushel to ethanol production.

Also, even if farmers stripped every bit of corn stover (stalks, leaves and cobs left after harvest) from their fields for this yet unproven approach to making ethanol, they would still come up with less than one-fifth of their goal. Meanwhile, stripping the soil bare of all protective cover would rapidly worsen soil erosion and water pollution problems.

This Growth Energy pipe dream is not only unsustainable, it’s an irrational use of our nation’s resources and taxpayer dollars – never mind the monumental negative effects on our waterways, soil, air and food price increases. The Environmental Protection Agency has already shrunk its mandate for cellulosic ethanol the past two years because of its questionable economic and environmental viability.

To see Growth Energy’s projections for yourself, look at this chart from their website (BGPY stands for billion gallons per year).

We’ll write more on this soon but in the meantime, the question lingers -- whose freedom is Growth Energy actually fueling?