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Dubya's Regrettable Bipartisanship

Timothy Noah
Posted Tuesday, June 12, 2001, at 5:23 PM ET

It figures that when the Bush administration finally decides to make a bipartisan gesture on the environment, it's to implement a bad policy long supported by both Democrats and Republicans. The Environmental Protection Agency today denied California Gov. Gray Davis' plea to waive the Clean Air Act's minimum oxygen requirement in gasoline, which, in the wake of Davis' sound decision to discontinue use of the oxygenate methyl tertiary butyl ether (MTBE), which was contaminating the state's water, could be fulfilled only by using ethanol. As Davis pointed out in a May 22 letter to President Bush,

Numerous assessments by government agencies, automotive companies and fuels industry experts confirm that a minimum oxygen content is not essential to making reformulated gasoline that meets all emission reduction requirements. Therefore, application of the current minimum oxygen content requirement serves absolutely no purpose in California relative to its intended air quality rationale--to reduce ozone precursors and toxic emissions from vehicles. ... Without the waiver, California consumers will pay a minimum of $450 million more a year for reformulated gasoline. A waiver would allow refiners and marketers to use reduced quantities of ethanol during periods of time when supplies are inadequate to meet demand. Supply disruptions can result in a rapid increase in gasoline prices that can persist for several weeks and result in costs to California consumers of nearly $650 million per month.

Davis' low enthusiasm for ethanol is shared by environmentalists. California Rep. Henry Waxman, who helped write the Clean Air Act, told the AP, "It really is an unbelievable decision. It's incomprehensible to me, because if the waiver had been granted, it wouldn't have any environmental consequences because the Clean Air [Act] requirements would still have to be met." The Natural Resources Defense Council is no great ethanol fan either. It points out,

[E]thanol production from corn in the U.S. is economically viable only due to a federal tax subsidy. Prospects for lowering costs on and expanding ethanol production are limited due to the high level of inputs required to produce agricultural crops (e.g., fertilizer, pesticides, tractor fuel) and the resulting high cost and substantial environmental impact.

So why is the Bush administration forcing ethanol down California's throat? In all likelihood, to pacify Senate Democrats! The new Agriculture committee chairman, Iowa's Tom Harkin, is a strong ethanol supporter because ethanol is made from corn. For the same reason, so is the new Senate majority leader, South Dakota's Tom Daschle. The bipartisan tsunami of political cash that has flowed over the years from the country's biggest ethanol supplier, Archer Daniels Midland, and its chairman emeritus, Dwayne Andreas, combined with the fact that Iowa casts the first presidential vote, have long guaranteed that a sufficient number of non-farm-state politicians will also support pro-ethanol policies. (Most disappointingly, Bill Bradley abruptly dropped his longstanding opposition to ethanol subsidies when he ran for president last year.) In Bush's case, it can scarcely have escaped his (well, perhaps, Dick Cheney's) attention that ADM shoveled $410,000 in soft money to Republicans during the last election cycle, and that it spent an additional $100,000 to help fund Bush's own inauguration. ADM produces about half the country's supply of ethanol and, Scott Kilman reports in today's Wall Street Journal, ethanol is responsible for about one-third of the company's profit. By substantially expanding the ethanol market, the EPA's decision will improve ADM's ability to keep political donations flowing. But it won't do much to reduce air pollution.

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Timothy Noah is a senior writer at Slate.
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[Notes from the Fray Editor: Interesting and detailed post from Tom R here, followed by a very funny exchange with Will Allen on the subject of Congressmen's accountability. Michael Murray started a good thread with his assertion that "Subsidies (corporate or otherwise) can only be valid if supported by a societal need that cannot otherwise be fulfilled by private interests alone"--Will Allen (again) argued that "A subsidy is an exercise of the state's implicit use of violence..."]


You gotta love this blatant taxpayer and consumer ripoff! Ethanol production is an incredibly expensive technology. First, the Midwest farmers get a Federal subsidy (from your tax dollars!) to grow the crops, primarily corn, that get converted to ethanol. Secondly, the production cost of corn production, harvesting, conversion, production and distribution create a very expensive fuel. Lastly, California refiners now have the technology to produce gasoline that exceed Clean Air requirements without ethanol or MBTE additives--making ethanol addition a redundant step. California consumers have the dubious privilege of having their Federal tax dollars help produce an inefficient fuel additive they don't need--and then paying higher prices at the pump to insure the profits of another Bush-friendly energy industry and payoff Dubya's Midwest political base at the same time. Amazing!

--IronMike

(To reply, click here.)


I don't understand why the use of of ethanol will increase the price of gas in California. I am a member of a farmer-owned ethanol plant (no connection with ADM) and the price of ethanol has for the past year and a half followed the price of gasoline to within a few pennies a gallon. Plus at this point in time the federal government and forgone the collection of 5.4 cents a gallon tax on a gallon of gas that contains 10% ethanol.
Another point in ethanol's favor is it is renewable. Yet another I won't have to watch our troops go off to the middle east to defend it (remember the Gulf War).

--Iowa Farmer

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You missed only one key factor in why ethanol should not be used in gasoline, in California or anywhere: The mixing of ethanol into hydrocarbons raises the volatility of all the gasoline, so that breathing losses to the atmosphere during fill-ups and elsewhere are markedly increased. In fact, it took waivers from Bush Sr and Clinton to even include ethanol, since it violates a so-called Reid vapor pressure spec.

--David Saletan

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