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Lamberty Report: "An Immodest Proposal"
by Ron Lamberty

There is an old phrase that says be careful what you ask for, because you just might get it. I wonder what would happen if the entire ethanol industry decided – voluntarily – to give the Governor of Texas, the 24 oil state Senators, and the big money PR campaign ethanol bashers the waiver from the RFS that they’ve all asked for… at least for a little while?

If the ethanol industry did what the oil industry always seems to do and went on an “extended turn around,” what would happen?

If all these genius simple-solution naysayers are right, and if the two percent of the world’s grain being used for ethanol is actually causing all the trouble they say, pretty much every problem in the world would be solved. Corn prices would drop, world hunger would end, grocery prices would plummet, the air would be cleaner, and refineries could make more fuel at a better price. We would have blue skies, chirping birds, and all people would hold hands and sing together in a spirit of peace and love.

But I suspect even they know that wouldn’t happen. In real life, corn prices would drop some, giving farmers less incentive to grow it in the future, making less corn available and driving prices higher. Removing the seven percent of the fuel supply that ethanol represents would cause gas prices to skyrocket, and since nobody can pin down grocery manufacturers on how much grocery prices would drop if the ethanol requirement was waived, they won’t. Grocery manufacturers would find some other scapegoat for keeping their prices artificially high.

Frankly, most of the people proposing an ethanol roll-back are probably hoping it doesn’t happen so they can lament higher prices while continuing to charge them, saying “we tried” and “we told you so.”

The real irony of this “immodest proposal” is that shutting down the ethanol industry for six weeks would mean an 89 percent utilization of production capacity. That’s a rate of about five percent better than U.S. oil refineries are producing so far this year. It’s ironic because the ethanol industry would be savaged by a press that wouldn’t think to ask the oil industry why it’s only operating at 84 percent of capacity at a time when the nation needs more fuel. Maybe reporters consider it rude to ask such a question to refiners with enormous advertising budgets, who make even more money by being less efficient.

It’s too bad the energy bill didn’t give us the ability to petition EPA for a roll-back from the 90 percent gasoline standard we’ve been suffering with for years. If all we had to do to get EPA to allow us to use E20 and E30 in our own cars was to prove “severe economic harm”…

 
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The American Coalition for Ethanol publishes Ethanol Today magazine each month to cover the biofuels industryís hot topics, including cellulosic ethanol, E85, corn ethanol, food versus fuel, ethanolís carbon footprint, E10, E15, and mid-range ethanol blends.
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