Commentary: Ethanol Content’s Unintended Consequences

I ran across a curious anomaly last month while on vacation way Down East in Maine. A marina is selling gas to boat owners for about 32 cents a gallon more than the going rate at local gas stations because it has to charge for the cost to import the gas from Montreal, 10 hours by truck from his business in Northeast Harbor on Mount Desert Island.

On the surface, that doesn’t seem to make sense, but boat owners are snapping it up. Why? Because Canadian gasoline doesn’t contain ethanol, the alcohol additive made from corn that provides the 10 percent of gasoline sold at U.S. service stations, required by the Environmental Protection Agency under the Clean Air Act.

“Ethanol can separate over time and attract water if it’s in the gas, and that’s what can plug carburetors and foul needle valves,” Clifton Docks owner Alan Joseph said. “It’s OK if you use the boat all the time, but if you don’t, that’s when you start having issues and have to add chemicals in to stabilize it.”

Gasoline with ethanol is a particular problem for boats with outboard motors, which don’t have the compression to burn it. Pleasure boat owners aren’t the only drivers having problems with ethanol. It affects commercial fishermen whose boats burn gasoline rather than diesel fuel. Owners of vintage cars dating before 1991 can’t use gasoline with ethanol because many don’t have engines designed for burning ethanol.

“There’s a serious amount of money tied up in boats and classic cars and trucks,” said Paul Taylor, chief economist of the National Association of Automobile Dealers. “All of this is a serious part of our economy that provides vacations.”

The government’s ethanol content requirements are a classic case of good intentions run amok with unintended consequences. Designed to reduce carbon emissions by providing subsidies for using a renewable resource, the ethanol requirement quickly became a boondoggle for large corporate corn farmers in the Midwest, especially Iowa, whose donations persuaded Congress it should be distilled from their crops.

The subsidies have ended, but the issue is likely to get a lot hotter if Congress raises the minimum ethanol content requirement for gasoline to 15 percent at a time when drought has slashed corn crop estimates by a third and already driven up fresh food prices and the price of all products produced with corn syrup. A growing number of congressmen are changing their minds on extending the ethanol requirement, and more than 150 House members have written the EPA requesting a waiver of the ethanol requirement.

The EPA should grant the waiver at a minimum, and Congress should balk at raising the content requirement, which will only fuel further increases in food prices.

Contact Peter T. Leach at pleach@joc.com.
 

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