Since the Environment Protection Agency (EPA) announced its recommendation to slash the amount of ethanol that’s blended into gasoline, the Internet has been in overdrive trying to either defend or condemn the suggested reduction. The EPA aims to reduce the required amount of ethanol added to gasoline, but some members of the senate are calling for an end to the mandate altogether via the Corn Ethanol Mandate Elimination Act of 2013 (CEMEA). Read on to learn about the most important aspects of the ethanol mandate and how, if at all, it impacts Americans.
1. It’s Old News
Image via Flickr by fishhawk
The ethanol mandate is nothing new. The bill was bundled in with the Energy Policy Act (EPAct) of 2005 and expanded in 2007. The mandate largely dictates how much ethanol (alcohol typically produced with corn) oil companies must purchase to create gasoline. The mandate’s initiative was to ensure a renewable fuel source was used in the production of all biofuel. The mandate also aimed to reduce greenhouse gas emissions. However, there is little evidence the mandate has actually accomplished its initial goals.
Opponents of the mandate have cited problems with the bill since the beginning. They claim that emissions remain unchanged, and food prices have gone up as a result.
2. It Impacts the American Economy
Critics of the CEMEA believe a reduction in the amount of the mandated ethanol in gasoline could significantly impact American ethanol refiners. Hundreds of ethanol refineries could lose valuable tax incentives, and politicians worry that some may shut down entirely.
Conversely, proponents of the measure believe it will positively impact the nation’s food prices, including feed prices for American farmers. Bloomberg Businessweek reports, “The part played by ethanol mandates in the global food price spikes of the last few years is debated. But it’s worth noting that as the U.S. corn ethanol mandate climbed from 4 billion gallons in 2006 to more than 12 billion by 2011, corn prices more than doubled.”
3. Changes Won’t Affect Drivers
If the mandate is overturned or the percentage of ethanol is reduced, the changes won’t affect drivers. In fact, it could benefit them. According to Politico, the EPA’s recommendation came at a time when, “[the] ethanol supply could soon outpace the amount motorists could actually use. The oil industry has warned that the result could be a spike in gasoline prices unless the government scales back the ethanol requirement.” A surge in gasoline prices is more likely to negatively impact drivers than the reduction or end of the ethanol mandate.
The EPA and the senate should come to a conclusion this spring. However, it’s uncertain just how much the economy will be affected in 2014. The ethanol industry and oil companies are on edge anticipating the decision. However, one thing’s for sure, consumers will likely be better off if the mandate is killed. Do you support the ethanol mandate or do you think it’s time to shuck it? Share your thoughts in the comments below.