The curious case of the federal government’s ethanol mandate is a matter of unintended consequences, political infighting and dogma masquerading as policy. And it provides a fascinating look at how intertwining factors and powerful lobbying efforts can sometimes leave lawmakers with no good alternatives in their efforts to do the right thing.
Here’s a rundown of a story that came to light this week in an extensive report by The Associated Press:
• In late 2007, President George Bush signed into law a mandate that ethanol be added to gasoline in an effort to combat soaring gas prices and to reduce greenhouse gas admissions. During his first campaign for president, Barack Obama supported ethanol production as an important weapon in fighting global warming, and his administration undertook the task of defining and implementing the policy once he took office.
• Ethanol is made from corn, and the federal mandate prompted farmers in the Midwestern United States — primarily Iowa, Minnesota, Nebraska, Illinois, and the Dakotas — to increase corn production as demand and prices for corn soared.
• According to The Associated Press: “More than 5 million conservation acres — environmentally sensitive farmland that had been set aside and allowed to grow as grassland — have disappeared on Obama’s watch. Every time a farmer plows into grassland, it releases carbon dioxide that had been naturally locked in the soil. In the name of reducing greenhouse gas emissions, the policy encourages a practice that emits greenhouse gas.”
• On top of that, increased corn production requires increased fertilizer use. This has negatively impacted the water supply in the Midwest, and it has affected runoff that is carried down the Mississippi River to the Gulf of Mexico.
Predictably, the Associated Press report generated a swift and angry response from the ethanol lobby, which questioned the accuracy of the study. Considering that farmers have benefited greatly by expanding their corn production while prices have soared, they have a lot to lose if the ethanol mandate were to be reduced or eliminated.
Meanwhile, the AP story serves as a case study in the myriad ways things can go sideways with poor government policy. As Dina Cappiello and Matt Apuzzo reported, “The ethanol era has proven far more damaging to the environment than politicians promised and much worse than the government admits today.”
All of this brings to mind the Dust Bowl that devastated the southern plains states in the 1930s. While exacerbated by The Great Depression and years of drought, the Dust Bowl’s initial cause was poor farming practices that plowed under grasslands and left fragile top soil exposed.
But it also brings to mind the old axiom about the best laid plans often going awry. The Bush Administration initially acted hastily but with what it thought were good intentions; the Obama administration compounded those mistakes and has done a poor job of monitoring what has happened with the land; and the policies have created a subsidized industry that now wields considerable lobbying power.
The snarky response would be to suggest that this is what happens when the government gets in the way of the free market. We won’t go that far; government intervention often provides a boost to the economy. But we will urge the feds to rethink their ethanol policies. The Environmental Protection Agency is expected to release in the next couple days the amount of ethanol that must be blended into gasoline during 2014, and it’s time to start scaling back the ethanol boondoggle.