Why Ethanol Is The Wrong Solution

Ethanol has been touted as the solution to the U.S. dependency on foreign oil. Its usage as a vehicle fuel has sparked debate from the scientific community with as many studies extolling the benefits of ethanol as there are the drawbacks. Some will say that the only studies favouring ethanol are the ones sponsored by those with an economic or political interest in its success, but in this ongoing series of blog entries, I will attempt to give you the undisputed facts and why I think that ethanol is the wrong solution to the problem of oil dependency.

First, a little history on ethanol and the auto industry:

Ethanol has been around since 1840 in North America. It first served as lamp fuel and in 1908, Ford adapted the Model T to run on it. Henry Ford called it “the fuel of the future” but in a few short years his plan had failed. Even back then, ethanol production needed to be subsidized by the federal government in order to survive.

In the 70’s, ethanol was once again brought forward as a solution to the oil embargo. Federal money went in to help build 163 ethanol plants in the U.S., but even with a tax credit of 40 cents per gallon, 89 plants closed within a few short years.

So why is ethanol gaining popularity today? There are several reasons and I’ll try to highlight a few of them here.

The price of oil: Oil has more than tripled in price from under $30 per barrel in 2000 to over $100 per barrel in 2008. As the price at the pumps rose, the public started to complain and the government started looking at alternatives.

CAFE ratings: The U.S. Congress enacted a law that would allow car manufacturers to take excess mileage credits for vehicles that were capable of using E85. I’ll have more on CAFE (Corporate Average Fuel Economy) ratings in a later post, but suffice it to say as SUV that gets 16 mpg on gasoline and 12 mpg on E85 would get a CAFE rating of 29 mpg. I call it "The New Math" by George Bush. Back on topic, CAFE ratings were going up in order to increase fuel efficiency and American manufacturers were facing multi-million dollar penalties if they didn’t reach the targets that were set for them. While import manufacturers were focused on the car market, the American producers were selling more and more trucks. By fudging the numbers of E85, or flex fuel, vehicles, American manufacturers could still produce fuel-inefficient vehicles and still meet the higher CAFE ratings. On a side note, the poorly thought out ecoAUTO rebate program in Canada gave cash incentives to consumers who buy flex fuel vehicles even though these vehicles got poorer mileage than other vehicles in their class and E85 was only available at a grand total of two gas stations in all of Canada.

The war in Iraq and misplaced patriotism: We’re all familiar with George Bush’s “you’re either with us or your against us” attitude and the effect that it’s had on misplaced patriotism (remember Freedom Fries?). Well, GM started an ad campaign with the slogan “Live Green, Go Yellow” that touted E85 as a way to reduce the dependence on foreign oil and promote fuel production in the US. The ad campaign neglected to tell you that your mileage would suffer by 25-40%, that your annual fuel costs would rise, that your tax dollars were subsidizing the ethanol industry, and that GM was in the flex-fuel business so that they could reach their increased CAFE ratings without actually increasing their vehicles' fuel efficiency.

So beyond all this, why is ethanol the wrong solution?

Ethanol is not compatible with older fuel storage tanks: More on this in a later post, but ethanol is a solvent. It is not compatible with fuel storage tanks manufactured prior to 1986 or lined single-wall steel tanks. The Ontario Ministry of the Environment issued an advisory in February, 2006 stating that fibre-reinforced plastic storage tanks are not compatible with ethanol (even at a 5% blend) and that it will cause a 30-50% reduction in structural strength. It states that pre-1979 tanks cannot use ethanol blended fuel and those built between 1979 to 1986 would require a leak detection system. It’s important to note that ethanol is absorbed in to the walls of these tanks and destroys the protective liner.

Ethanol is not compatible with older vehicles: If you own an antique or classic car, ethanol is not compatible with your fuel system. Since it is a solvent, any rubber hoses or gaskets will be damaged and could result in a fuel leak. Any sludge buildup in your tank will be released and could potentially clog fuel pumps, filters, and carburetors or even cause engine failure. Another problem is that ethanol absorbs water. While this may not be a problem for vehicles that run year round and constantly replace the fuel in the tank, an infrequently run classic car that gets stored for the winter will suffer from this. A lot of antique vehicles can be adapted to run on ethanol by replacing tanks, lines, filters, and rubber components. Switching your car from a carburetor to fuel injection will also help, but for Concours, show cars, or fully restored cars, this isn’t an option.

Ethanol production fuels inflation: It’s simple Supply and Demand economics. As farmers switch to corn production to meet the ever-increasing demand, production of other crops fall. The increased demand causes corn prices to rise and the lack of supply of other grains causes their prices to increase. The U.S. Department of Agriculture warned in late 2007 that the diversion of corn to ethanol production will cause record corn prices. Since corn is used as a primary feed source for livestock, beef and poultry prices will rise. The move from other grains has already caused the wholesale price of flour to double and it is expected to double again by year-end. Expect the price of your bacon and egg breakfast to go up, as well as your pasta lunch, the side order of bread, that glass of pop or beer, and your dessert to increase significantly this year.

Ethanol doesn’t target the real problem of consumption: The reason ethanol is being proposed as a fuel source is to combat dependency on foreign oil. We simply consume too much oil. Ethanol doesn’t reduce that consumption, it just replaces it with something else. As stated earlier, it will actually cause an increase in consumption. All things being equal, if your driving habits don’t change, you’ll use 25-40% more fuel, plain and simple.

To summarize: Ethanol is wrong on so many levels. Let’s abandon this ill-conceived experiment before it’s too late.