On Thursday the EPA announced that it is seeking comments on a proposal to increase the permitted amount of ethanol in regular gasoline to be increased from 10% to 15%. This debate will pit the army of lobbyists from two struggling industries against each other. On one side we have the corn industry, which has been struggling mightily since their market became saturated last year. Currently one-quarter of all corn produced in the U.S. is used to make ethanol. Increasing the gasoline blend limits would help prop up this highly subsidized industry.
And on the other side we have the even more vulnerable automotive industry. While carmakers, like GM, have been touting their green “flex-fuel” capabilities (read: boondoggle), they argue that if 15% blends are used in their older models that it could damage those vehicles’ fuel lines. Alan Adler, a GM spokesman disclaimed that “we want to be sure that we’re not on the hook for vehicles” that end up having problems with higher blends.
Of course, it is unclear in this debate which policy is actually in the public’s interest. We have two industries that are so thoroughly dependent on government subsidization for survival that anything they say or do must be viewed in that light. This is just one of many examples of how government mandates can distort the noble goal of improving the environment and decreasing our use of foreign oil. However, as see with this current debate, comprehensive subsidies and mandates are a clunky and inefficient solution to an incredibly complex problem.