The Dethroning of King Corn in the US Ethanol Industry
https://www.realclearenergy.org/articles/2018/08/17/the_dethroning_of_king_corn_in_the_us_ethanol_industry_110328.htmlMany have been criticizing ethanol ever since the corn-alcohol distillate was proposed as an anti-knock additive to replace lead in gasoline. In the mid-2000s, faced with the prospect of diminishing oil production and higher energy prices, the U.S. Congress turned to ethanol as an alternative fuel that could supplement and (supporters claimed) eventually even supplant gasoline in the our fuel supply, along with biodiesel from corn and soybean oil.
The oil and gas fracking revolution over the last decade, however, has shown the pessimists were wrong. Yet, a federal mandate that requires refiners to blend increasing amounts of ethanol into gasoline each year lives on. Now E10 — an approximately 10 percent ethanol-blended gasoline — is pervasive in the U.S. fuel supply, and the ethanol industry is well developed.
A victim of its own success, ethanol is under mounting pressure.
Economists point out the inefficiency of using fossil fuel-derived fertilizers to grow an “alternative fuel†with only two-thirds the energy content of gasoline. Environmentalists decry the conversion of marginal lands to grow crows for fuel stocks. Clean air advocates warn about the adverse health effects of ethanol’s significantly higher emissions of ozone-forming nitrogen oxides. Indeed, recent developments suggest the overthrow of King Corn may be coming. Consider:
* In January 2018, Philadelphia Energy Solutions, the largest refiner in the eastern U.S., filed for bankruptcy because of the $200 million — twice as much as its payroll — it was forced to pay for credits since it could not properly blend-in ethanol;
* On June 29, 2018, EPA released a long-delayed report that finds the federal ethanol program harms the soil, water, and air; and
* On July 26, 2018, 21 U.S. senators wrote EPA Acting Administrator Andrew Wheeler, warning him not to “deviate from sound policy and the law†by “retroactively reallocating obligations†to blend ethanol the EPA regularly waives for small refiners to larger refiners....
