EPA Eyes 15% Ethanol Mix: Automakers Decry Warranty Woes

April 17, 2009

(ChattahBox)—The U.S. Environmental Protection Agency or EPA made an announcement today, saying it’s considering allowing as much as 15 percent ethanol mixed in with gasoline. This news makes ethanol producers very happy, as they are on the verge of bankruptcy as ethanol prices have plummeted and corn prices remain high. Automakers on the other hand, worry about being on the hook for warranties that meet current EPA standards allowing for vehicles that can accommodate a 10 percent ethanol mix.

The EPA is responding to a new lobbying effort spearheaded by ethanol producers, who have lobbied Congress and hired former Democratic presidential candidate Wesley Clark to lead the charge. Many ethanol producers have already filed for bankruptcy protection.

Many of the problems suffered by the ethanol industry result from an overproduction of ethanol. Nearly a quarter of all corn grown in the vast farm lands of the U.S. are converted into ethanol. With gas prices now at the low range, there is less demand for ethanol. Sure, demand will increase when gas prices surge again, but will also plummet once gas prices stabilize, creating a vicious cycle with no positive end game.

Converting a food crop to ethanol also has consequences when less of the corn crop is used for food production. The result is higher food prices and a global food shortage, when a staple food crop like corn is not used for food.

A recent study conducted by the Center for Agricultural and Rural Development estimates that ethanol production has already raised food prices for each U.S. citizen by $47 per person annually.

Once the EPA gives its approval to raise the ethanol mix, producers may step up production, causing further food shortages and higher prices. It seems like allowing a higher ethanol mix would offer short term relief to ailing producers, but with long term consequences affecting the global food supply.

Perhaps it makes more sense, as a basis of sound environmental policy, to focus on alternative sources of energy, that don’t produce polluting emissions, like all-electric vehicles.

Some of the major ethanol producers that would benefit from an increase in the ethanol percentage, are , Archer Daniels Midland Co., Pacific Ethanol Inc., VeraSun Energy Corp and Aventine Renewable Energy Holdings Inc.

Industry proponents of the increased ethanol mix say it would allow the U.S. to reduce its dependence on foreign oil.

Automakers, like General Motors are seeking government assurances from the EPA that they won’t be stuck paying costly repair bills, if cars manufactured to run on a 10 percent ethanol fail to run properly on a 15 percent ethanol mixture.

The EPA can expect competing interests of large ethanol producers, the automakers, environmentalists and others concerned about food shortages and high food prices during a recession.

The EPA is seeking public comment on increasing the ethanol mix, with a decision expected by the end of the year.

Source


Comments

4 Responses to “EPA Eyes 15% Ethanol Mix: Automakers Decry Warranty Woes”

  1. Alfazedz on April 17th, 2009 9:47 pm

    Typical. Warranty? That’s not our (EPA) problem. They suck. A bunch of watermelons they are. Bastards.

    Government involvement screws everything up.

  2. Green Blogs » Blog Archive » EPA considers higher ethanol blends on May 5th, 2009 3:53 pm

    […] reports that the U.S. Environmental Protection Agency (EPA) is considering allowing as much as 15% ethanol […]

  3. Rivers27Melinda on April 10th, 2010 9:08 am

    Following my exploration, billions of people on our planet get the loan from different creditors. So, there is good chances to receive a car loan in every country.

  4. john franks on May 2nd, 2010 11:23 am

    after the big oil spill in the gulf maybe epa should think about how save raising corn is for ethanol. besides we are wanting to get away from all that middle east oil dont we (NOT BIG OIL) .MAYBE USE E85 ONLY what would big oil say then

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