https://amgreatness.com/2018/11/21/rent-s
President Trump announced last month that his administration will take actions to allow the year-round sale of fuel containing 15 percent ethanol, which is currently banned during summer months. The rent-seeking justification for this expansion of a flawed policy revved up immediately, in the form of a Wall Street Journal op-ed by Iowa U.S. Senators Chuck Grassley and Joni Ernst. They lauded the decision, as well as the existing federal mandate to blend ethanol with transportation fuels, citing the contributions to the nation’s job growth, GDP, and tax revenues.
The same arguments could be made for a federal law mandating that all the alcohol in hard liquor and mouthwash be derived from corn. Would that be sound public policy?
Politics aside, any defense of U.S. ethanol policy must embrace a series of fallacies which include:
ethanol produced from corn makes the U.S. less dependent on fossil fuels,
ethanol lowers the price of gasoline,
an increase in the percentage of ethanol blended into gasoline boosts the overall supply of gasoline, and
ethanol is environmentally friendly and lowers global carbon dioxide emissions.
Although none of these claims is true, the ethanol lobby continues to promote them, and many politicians—particularly in the major corn-producing states—seem intoxicated by them.
Politicians like to say that ethanol is environmentally friendly, but these claims are misleading. Although corn is a renewable resource, it has a far lower yield relative to the energy used to produce it than ethanol from sugar cane. Moreover, ethanol yields about 33 percent less energy per gallon than gasoline, so mileage drops off significantly. Fuel costs for Americans are often artificially inflated due to the low energy content of ethanol (in spite of a possible octane boost) and the high costs faced by fuel companies trying to comply with ill-conceived fuel regulations. In a 2014 study, the Congressional Budget Office found that raising the mandated use of corn ethanol raises motor fuel prices.