Professor Flunks Ethanol 101

Posted on: January 18, 2013 in Corn, E15

Flint, Mich., is known throughout the world as the birthplace of General Motors. When an economist from Flint gets the facts about motor fuels all wrong, it’s time to assign him some remedial homework.

In an op-ed in The Flint Journal on January 16, Mark J. Perry, an economics professor at University of Michigan-Flint, earned a failing grade in Ethanol 101. Here’s why Professor Perry needs to hit the books about biofuels:

Warning against E15 blends (15 percent ethanol, 85 percent gasoline), Perry claims that ethanol “can damage automobile engines and fuel systems.” In fact, E15 is the most tested fuel in history. Coordinated by the U.S. Department of Energy and its affiliated National Laboratories, the tests have driven the equivalent of six round-trips to the moon and have included vehicle drivability, catalyst durability, fuel pumps and sealing units, outboard diagnostic systems, and automotive fuel system components.

The verdict: The U.S. Environmental Protection Administration (EPA) has approved 15 percent ethanol blends for cars, light-duty trucks and SUVs built in 2001 or later — approximately 62 percent of the light-duty vehicles on the road today.

While Perry writes that “40% of the U.S. corn crop is used to produce ethanol,” that statement is misleading. Ethanol production doesn’t use sweet corn (which is intended for human consumption), and U.S. ethanol production uses only three percent of the total global grain supply.

Moreover, ethanol uses only the starch in the grain, with the protein, fat and fiber made into animal feed for beef and dairy cattle, hogs, poultry, and fish around the world. In fact, the American ethanol industry generated 37 million metric tons of feed in 2012 — enough to produce seven quarter-pound hamburger patties for every person on the planet.

Perry is also wrong when he contends that ethanol “has increased retail food prices and strained family budgets.” In fact, only 14 percent of the average household’s food bill pays for raw agricultural ingredients such as corn. Eighty-six percent of their food bill pays for energy, transportation, processing, packaging, marketing and other supply chain costs.

Nor is it true that “ethanol costs about 70 cents a gallon more than gasoline on an energy-equivalent basis.” In fact, the use of ethanol reduced wholesale gasoline prices by an average of $1.09 per gallon in 2011, according to research by economics professors at the University of Wisconsin and Iowa State University. If ethanol doesn’t pack the punch to power our cars, then why do so many professional racecar drivers fuel their  vehicles with … ethanol?

Meanwhile, Professor Perry makes sophomoric mistakes. He writes about “a 51-cent-per gallon tax credit” for biofuels, even though the credit expired, with the industry’s approval, at the end of 2011. He asks policymakers “to halt the production of E15,” even though E15 is blended, not produced, from ethanol and gasoline. (Would he demand no more “production” of coffee with milk and sugar?) And he seems unaware that, in approving E15, the EPA was offering Americans a choice at the pump, not a mandate.

While he concludes that cellulosic (non-grain) ethanol is “still not viable,” at least eight commercial advanced ethanol plants are under construction or commissioning.

U.S. ethanol, including E15 blends, offers our nation’s motorists a cost-saving, American-made, environmentally-friendly alternative to foreign oil, as well as a pathway to the next generation of biofuels.

As for Professor Perry, he needs to take Ethanol 101 all over again.

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