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Oil Industry Sues To Overturn Ethanol-In-Gasoline Mandate

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Big square baler harvesting wheat straw for production of cellulosic ethanol

Big square baler harvesting wheat straw for production of cellulosic ethanol

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Paying too much for that fast-food burger?

Blame the government's ethanol targets, says the oil industry--and it's sueing the Environmental Protection Agency for what it describes as "overzealous" biofuel mandates.

The American Petroleum Institute filed the lawsuit over the EPA's decision to mandate the use of 1.28 billion gallons of biodiesel in 2013, reports The Detroit News. That figure is 28 percent higher than the 2012 target

The API says the EPA has even admitted that the costs outweight the benefits of such a mandate by $425 million.

And those burgers? The National Council of Chain Restaurants has stepped in too, saying it could cost the industry $3.2 billion annually. Corn is an essential feed for pork and beef producers, and increases in cost have pushed up the cost of meat across the board. It's yet another symptom of the food versus fuel debate--With huge swathes of land devoted to crops specifically for fuel, it puts restrictions on the amount which can be used for feeding both humans and livestock.

The API's lawsuit is also the latest in a long stream of back-and-forth battles between the EPA's mandates for ethanol and biofuel use, and opposing parties who face significant costs as a result.

Automakers sued the EPA back in 2010, in order to prevent the use of E15--over worries it would damage the fuel systems in their cars.

The EPA won that battle as recently as a few months ago, when courts showed that none of the parties involved could conclusively prove they were harmed by the decision.

And earlier this year, the EPA was criticized by the industry, who say its demands for certain quantities of non-corn ethanol were too high.

Not everyone loses out, of course--the increased demand for corn has seen corn prices jump 400 percent in recent years, hugely benefitting corn farmers.

The EPA says that even if it waived the mandate, corn prices would drop by a mere 1 percent.

Opponents to those appealing against the EPA's mandates say the renewable fuel standards are creating jobs in central America. Tony Buis, CEO of Growth Energy, says the API's lawsuit is "a classic example of the fox guarding the chicken coop".

Whatever the costs and benefits of ethanol and biofuels, it seems the results are the same as ever--plenty of fighting between stakeholders, but little in the way of progress.

We don't see burgers getting any cheaper, either...

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Comments (3)
  1. Just the name American Petroleum Institute makes me want to laugh.
     
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  2. American corn farmers couldn't cash in on high corn prices this summer as drought dryed up their fields. Beyond the field, another 2.5 gallons of water is required to make a gallon of ethanol. If the decade long drought continues, so will higher corn prices!

    How much longer will the ethanol mandates & import restrictions last?
     
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  3. Corn based ethanol is more damaging to the environment than pure crude oil based gasoline. It barely yields net energy (EROEI), after all the inputs are factored, fertilizer use pollutes the gulf and high grain prices destroy wild habitats and contribute to deforestation. In contrast, oil production has a relatively small footprint, compared with farmland. The oil import argument is losing strength with the domestic shale/tight oil boom. The real alternative is natural gas, which is feasible for powering large vehicles. It will take some time for cars, due to the packaging constraints of natural gas tanks.
     
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