American Elephants

Big Government Intrudes in Your Life, Part IV. by The Elephant's Child
April 5, 2010, 10:33 pm
Filed under: Economy, Energy, Law, Statism | Tags: , , ,

In Part II, we discussed the Obama administration’s EPA’s new rules forcing automakers to increase their vehicles’ fuel economy by 40% in five years. This will cost Americans a bundle — raising the price of a car from $1,000 to $5,000 more, kill jobs in the auto industry and incidentally kill a lot of people on the highways by forcing car makers to make lighter, more vulnerable cars. That happened on April 1.

The next day, the same EPA favorably reviewed an ethanol fuel mandate that would force cars to get up to 5 percent poorer fuel efficiency. Fifty two ethanol producers known collectively as “Growth Energy” (Big Corn) want the EPA to boost existing requirements that gasoline contain 10 percent ethanol to 15 percent.  That change would mean billions more in government subsidies for companies in the business of growing corn and converting it into ethanol.

For the rest of us, it means significantly higher gasoline prices, higher food prices (you have no idea how many things contain corn), and gasoline that contains less energy and won’t go as far. Ethanol is an inefficient fuel.  It reduces gas mileage by 5.3 percent.  Repair bills will climb because engines are not designed to handle 15 percent ethanol.  Vehicle warranties specifically exclude damage from the use of unapproved fuels, so the costs will fall on drivers.  How much damage, I don’t know.

The policy is distorting the market for food.  “Big Corn” wants the government subsidies, because without the government mandate, who would buy ethanol?  There is no justification  for this intervention. This is not the time for useless “green” games.  The EPA should reject “Big Corn’s” rent seeking, and Congress  should repeal all ethanol subsidies.

Actually, Congress should repeal the EPA.  What a useless organization!

%d bloggers like this: