Gasohol law raises questions of impact on US food production
Will the federal government continue to press for the replacement of gasoline with gasohol in most of the 159 million cars and trucks now operating in the United States?
Gasoline usually consists of 90 percent gasoline and 10 percent alcohol.
The feeling in Washington now is that the Reagan administration won't ''buy'' such a program. The fact is, however, the Carter administration and the Democratic Congress last year enacted a law that requires just such a switch.
Officially called the US Energy Security Act of 1980, but known informally as the ''syncrude law,'' it provides more than a half dozen subsidies and incentives to a company producing ethanol alcohol to extend the nation's petroleum supplies.
Former President Carter and many of the congressmen who supported the syncrude measure hoped that it would also extend their stays in office because the act was strongly favored by US farmers. When fully implemented, it would increase the demand for corn or other feedstock by 100 million tons by 1990.
The major subsidy provided in the law is the cancellation of the 4 -cents-a-gallon federal road tax now applied to gasoline. Since one gallon of ethanol alcohol can produce 10 gallons of gasohol, the subsidy amounts to 40 cents for each gallon of alcohol produced.
However, 38 states also have reduced their road taxes on gasohol by about 5.5 cents. When combined with the federal tax cancellation, the total subsidy comes to about 95 cents a gallon.
This will substantially reduce the funds available in the federal and state coffers for maintaining and improving the nation's highway system. It is estimated that by 1990 the total loss of federal revenues as a result of this measure would amount to about $27 billion.
Using a phased-in timetable, the syncrude act calls for a gradual increase in the production of ethanol to 1 billion gallons by 1982, 4 billion gallons by 1985, and 10 billion gallons by 1990. This could produce 10 billion gallons of gasohol next year, 40 billion gallons by 1985, and 100 billion gallons by 1990.
In 1980, US vehicles burned 109 billion gallons of motor fuel, a demand that is expected to stay about level in this decade.
While most Americans applaud the idea of being less dependent on OPEC petroleum, this program has other weaknesses.
First of all, ethanol has about 38 percent less energy, or British thermal units (B.t.u.), of heat than gasoline. Since this loss of energy is also divided by 10, there is a net loss of almost 4 percent from each gallon of gasohol.
The issue is attracting some attention. Energy, a magazine published by Resources of the Future, a nonprofit Washington think-tank supported partially by the Ford Foundation, recently printed a special issue in opposition to the gasohol portion of the Energy Security Act.
The magazine reported: ''With the generous subsidies provided, mainly by the federal government, the ethanol industry is off to a fast start. The one-billion-gallon goal for the end of 1982 seems well within reach. In effect, bushels of American corn are being traded for barrels of OPEC oil.''
Writing in Energy, Fred H. Sanderson, former director of the Office of Food Policy in the Department of State, noted that a third of the 100 million tons of corn or grain would be returned to the food system as byproduct protein for livestock.
However, he added: ''What has generally been overlooked is the far-reaching impact of the (gasohol) program on our food system as heavily subsidized fuel alcohol competes for an even greater share of our agricultural resources.''
Among the impacts he sees are substantial increases in the cost of the corn and other agricultural products, much of which is now exported. As a result, US farm exports would be reduced while its oil imports would be cut.
The result would be no meaningful reduction in US balance of payments, an ostensible purpose of the gasohol program. Yet the act is still on the books.