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The politics of ethanol outshine its costs

Despite higher food prices and environmental damage, it's warmly embraced in Congress.

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With gasoline near $3 a gallon, climate concerns rising, and an election season in full swing, politicians are eager to tell constituents that they're doing something to help at the gas pump.

Enter ethanol – or, more specifically, a plan in Congress to mandate that US gasoline refiners add a minimum of 36 billion gallons of ethanol to the nation's gasoline supply – up from the 7.5 billion gallons currently mandated by 2012.

Ethanol's popularity comes despite charges from environmentalists, livestock farmers, and opponents of subsidies that the move won't meet energy goals and may damage the environment as food prices soar. Energy-security experts say the measure also falls short on a key goal: weaning America off foreign oil.

Boosting ethanol production is the political equivalent of motherhood and apple pie these days. Politicians on both sides of the aisle as well as presidential candidates eager to do well in Iowa, the nation's No. 1 ethanol-producing state, are behind the measure, unglamorously named the "Renewable Fuels Standard." The RFS, part of the energy bill in the Senate, is so popular that it may be enough to ram through energy legislation this year, despite bitter disagreements over other parts of the bills.

"Quite a few folks around here think the biofuels title alone can carry the entire energy bill," says Bill Wicker, a Democratic staff aide for the Senate Committee on Energy and Natural Resources. "Biofuels are not a red-state, blue-state issue."

The energy bill faces the threat of a presidential veto, but if RFS does become law, it would provide a huge boost to the ethanol industry. The measure would create a demand for about 36 billion gallons of ethanol by 2022, or about 15 percent of US gasoline consumption, nearly a fivefold increase from the target under the current law. It could also save the industry from an acute glut.


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