Gasoline Now with 50% More Corny Goodness

On October 14, the Environmental Protection Agency issued a waiver to allow for the sale of ethanol gasoline containing 15% ethanol (E15) with a limitation on cars 2007 or newer. As obligated under section 211 of the Clean Air Act (CAA), the EPA granted the waiver for gasoline that is not “substantially similar” to fuel certified under the CAA after conducting extensive studies. This alters the previous maximum ethanol allowance in the United States of 10%. The limitation is based on testing which shows that E15 will not have a detrimental effect on the emissions controls used in cars and light trucks made in 2007 or later. Not covered in the waiver are vehicles with a model year before 2007 and other small engines such as motorcycles, lawn mowers, and snow blowers. With the waiver comes the additional requirement that pumps dispensing E15 fuel post a notice on the pump that only cars and light trucks 2007 or later are permitted to use the fuel.

The waiver was praised by farmers and environmental groups as a step in the right direction toward weaning the United States off of foreign produced fossil fuels. As corn is subsidized by the United States government, a majority of the corn that would go towards the 50% increase in allowable ethanol would be homegrown. However the decision comes with guarded optimism as proponents are disappointed by the limited scope of E15’s approval, and wish that the application be extended to pre-2007 models of automobiles. This comes as a result of proponents of ethanol such as farmers and alternative energy proponents wanting to compete with gasoline’s dominance in the American fuel market.

Although being praised by some environmentalist, the issue presents certain dangers for the environment. An ad sponsored by the Environmental Working Group and Natural Resources Defense Council shows that hot burning E15 can erode catalytic converters on certain engines. The catalytic converter is the little contraption on the back of small engines that is responsible for reducing the emission from a vehicle; if this contraption is corroded the emissions can be more harmful for the environment. The ad also expresses concerns over fragile farmland being repeatedly plowed to produce corn, and the potential cutting down of forests to clear more land for corn production.

Despite the immediate impact of benefitting corn farmers across the country, the EPA’s decision does not make me so optimistic that the allowance will shine so favorably for farmers in the long term. Brazil, currently the world’s leading producer of sugar cane based ethanol, issued a statement indicating its desires to enter into the American market with its sugarcane ethanol following the allowance of E15 by the EPA. In a statement shortly after the EPA’s decision, Joel Velasco, the president of Brazil’s Sugarcane Industry Association (UNITA) issued a statement urging both the Brazilian and American government for a move toward free trade. It desired for Brazil to make its recent postponement on tariffs for biofuel permanent, and at the same time for Congress to eliminate the very government subsidies it offers to corn farmers to produce corn. As the carbon emission from sugarcane based ethanol is less than that of corn based ethanol, and corn based ethanol requires large quantities of developed land for farming, the support that corn farmers received from environmental groups wishing to increase renewable energy may wane in favor of a free trade relationship with Brazil.

The EPA’s decision most likely will not destroy vehicles’ exhaust systems, nor will forests and trees be leveled due to this allowance. However, there may be cause for concern for those corn farmers that expect a booming corn demand to come from this waiver. Brazil’s sugarcane industry is a powerful one, and the 2007 meeting between then President Bush and Brazilian President Luiz Inácio Lula da Silva concerning the expansion of biofuels may prove to have laid the necessary groundwork for Brazillian sugar cane ethanol expansion into the United States, despite the new Obama Administration. Sugarcane presents a cheaper and more efficient source of ethanol than corn. The international economic effects of the spreading allowances for green technology present unknown horizons for the American agriculture industry, and one can only wonder whether the EPA sufficiently weighed this consideration in their decision.