Corn Growers Seek Mandate For Ethanol
But the oil industry and environmentalists, who say the corn-based fuel increases ozone, are fighting it
'THE only way we are going to get American oil companies to use gasohol is to mandate its use," declares Jerome Joyce, an Illinois corn grower who is also a state senator.A bill he introduced last month aimed to do just that: Over 11 years, gasoline sales in the state would be phased out in favor of gasohol. That is a blend of 90 percent gasoline and 10 percent ethanol, an alcohol usually derived from corn. Senator Joyce's bill didn't make it to the floor of the Illinois House. But the concept was being kept alive by advocates, who hoped to attach it to another bill last weekend as legislators rushed to complete a number of crucial bills by the session's scheduled June 30 close. Gasohol already has a 28 percent share of the Illinois motor fuel market, and 8 percent of the United States market, due to a 6-cent-a-gallon federal subsidy and state subsidies of several cents more. But states with busted budgets have been eliminating their gasohol subsidies, causing sales to drop from 8.1 billion gallons in 1988 to 6.1 billion last year, according to the Federal Highway Administration. Illinois also faces a massive deficit, but its 2-cent-a-gallon subsidy, which costs the state $27 million a year, won't expire until next year. Last fall Congress extended the federal subsidy through 2000. Ethanol sales in Illinois have hit a ceiling because major oil companies won't sell gasohol here, says Mark Lambert of the Illinois Corn Growers Association. "Ethanol sales displace oil sales," he reasons. So although the corn growers traditionally oppose mandates, Mr. Lambert believes one for ethanol is justified. "Our mission is to increase corn usage. We're going to do that any way we can." Joyce says that for every 100 million bushels of corn used to make ethanol, the price of the whole crop rises by four to six cents a bushel, and 2,250 new rural jobs are created. Ethanol production will consume 250 million of the 8.3 billion bushels of corn that US farmers grow this year. The oil industry has been fighting government efforts to impose gasohol on it since 1978, when gasohol became a legal fuel in the US. "Don't mandate the product," a spokeswoman for Amoco Corporation says. "If the market is there and the people want to buy it, we'll offer it for sale." Amoco does offer gasohol in Iowa, South Dakota, and Nebraska. But it says the fuel gives lower mileage and less acceleration, and can cause vapor lock. The company has found that even in farm states some motorists will pay more for straight gasoline. Aside from marketplace rationales, opponents of a gasohol mandate cite environmental concerns. They agree that gasohol reduces carbon monoxide emissions, but argue that it increases emissions of ozone-forming compounds. And ozone, not carbon monoxide, is the problem in metropolitan East St. Louis and Chicago, which account for two-third of Illinois gasoline sales. "It's been cited in studies - although everyone is challenging each other's studies - that ethanol in an ozone non-attainment area such as Chicago would worsen the problem," says Don Schaefer of the Illinois Petroleum Council. "That's just one more lie," says Martin Andreas, senior vice president of Archer Daniels Midland Company. The Decatur, Ill.-based ADM makes 70 percent of the nation's ethanol. The truth, Mr. Andreas asserts, is that ethanol-blended gasoline is "either neutral or slightly beneficial" on ozone-related emissions. However, ADM has taken a neutral position on a mandate for Illinois, Andreas says, even though the company has been a powerful and effective lobbyist for ethanol in the past. "If the corn growers want to go for a mandate, we're not going to oppose that." One reason ADM can afford neutrality is that portions of the Clean Air Act Amendments of 1990 were written specifically to expand consumption of ethanol. Congress even went as far as to waive one antipollution requirement that would have excluded ethanol-blended gasoline. For instance, beginning next year, gasoline with a minimum oxygen content of 2.7 percent must be sold during winter in the 41 US cities with the worst carbon monoxide pollution. "Ethanol is the one oxygenate which is readily available in those non-attainment areas. It's already being made in mass quantities," Schaefer says. The ethanol industry can produce 1.2 billion gallons per year. The Renewable Fuels Association, the ethanol manufacturers trade group, calculates that the new Clean Air Act will cause near-term demand for ethanol to increase 500 million to 600 million gallons, using 200 million to 240 million bushels of corn.