Drunk on Ethanol

The answer is the American public.

The question was: Who would spend 10 cents to 20 cents more per gallon for gasoline that reduces mileage, degrades your car, destroys fish and wildlife, increases air pollution, and makes the United States more dependent on foreign oil?

With its 1990 amendments to the Clean Air Act, Congress tried a revolutionary strategy: regulating not just how gasoline was burned in motor vehicles but how it was made. The idea was to require the use of gasoline with at least 2 percent oxygen-containing chemicals (oxygenates) in areas where clean-air standards weren't being met. This way more carbon monoxide, toxic hydrocarbons, and smog-producing volatile organic compounds would get burned up.

Senator Bob Dole (R-KS), Senator Tom Daschle (D-SD), and other politicians from the Corn Belt who had pushed this "reformulated-gasoline program" were ecstatic. The amendments created a new future for the corn-produced oxygenate ethanol (a.k.a. "white lightning" or grain alcohol), which hadn't found a decent market for anything save drinking despite $5 billion in federal subsidies. With the mandated use of "gasohol" (one part ethanol, nine parts gasoline), the moribund ethanol industry would spring heel-clicking from its wheelchair.

Agribusiness would prosper. And America would get cleaner air and homegrown energy. It was going to be a win-win-win-win.

Fourteen years later there are 78 ethanol plants in 19 states. More than half are being expanded, and scores of new ones will soon come online. Fully 10 percent of all corn grown in the United States goes into ethanol. And Senator Daschle, Representative Dennis Hastert (R-IL), and President George W. Bush have been trying to legislate a mandate requiring states to increase the amount of ethanol used in reformulated gasoline from about 3 billion gallons to 5 billion gallons by 2012.

But the reformulated-gasoline program has turned out to be a colossal failure, and the ethanol industry has transmogrified into a sacrosanct, pork-swilling behemoth that gets bigger and hungrier with each feeding. Ethanol dirties the air more than it cleans it. Its production requires vast plantings of corn, which wipe out fish and wildlife by destroying habitat and polluting air, soil, and water. Of all crops grown in the United States, corn demands the most massive fixes of herbicides, insecticides, and chemical fertilizers, while creating the most soil erosion.

To the chagrin of Corn Belt politicians, there was nothing in the 1990 amendments that says the oxygenate used in gasoline must be ethanol. There is another polluting oxygenate, derived from natural gas, which we also don't need. It's called methyl tertiary butyl ether, or MTBE. In noncompliant states outside the Corn Belt—or even in compliant states that wanted to be excused from other clean-air investments mandated by the Environmental Protection Agency (EPA)—MTBE became the oxygenate of choice. These states would have used ethanol had it not been so difficult and expensive to import. Ethanol separates from gasoline when it encounters moisture in pipes and storage tanks; so unlike gasoline oxygenated with MTBE, gasohol cannot pass through existing pipelines. Instead, ethanol—which costs three and a half times as much as gasoline to produce and yields 20 percent less energy—must be shipped separately and mixed on-site. And because ethanol evaporates so rapidly, it can be added only to a special and expensive "blendstock" of gasoline. Some coastal states might import foreign ethanol if U.S. ethanol weren't protected by a 54-cent-per-gallon foreign-trade tariff.

MTBE comes with a different set of liabilities. For one thing, if you drink it, you'll suffer lots more than a hangover. While it's by no means the most toxic of fossil fuel derivatives, it's among the worst smelling and tasting, and it penetrates farther and hangs around longer than most any other. Still, by marketing MTBE, the oil and gas industry performed an important public service. MTBE's vile taste and odor in tap water alerted the nation to the deplorable, porous condition of underground gasoline storage tanks, which were leaking into aquifers. To hear Corn Belt politicians and ethanol manufacturers talk, you'd think their single overriding concern is safe drinking water for California, the Northeast, and other places where MTBE gets mixed with gasoline. "MTBE has contaminated groundwater in 43 states and is considered by public health experts to present a risk of cancer in humans," proclaims Senator Daschle. "It is estimated that there are at least 150,000 MTBE-contaminated sites nationwide." But America doesn't have an MTBE problem so much as it has a leaky-gas-tank problem. And since the MTBE panic of the late 1990s, there has been progress in fixing the tanks.

With the enthusiastic help of the ethanol lobby—most notably the Renewable Fuels Association—17 states have banned MTBE. Most are in the Corn Belt and never would have used it anyway, but there were three major exceptions: California, New York, and Connecticut. MTBE bans in these states have created a de facto ethanol mandate.