Flex-fuel mandates: throwing bad regulation after bad

by Marlo Lewis on May 5, 2009

Rent-seeking–the whoring after market-rigging rules and subsidies–is a true addiction, an appetite that grows with feeding. For the ethanol lobby, it’s not enough that government props up their product with Soviet-style production quota, protective tariffs, a 45-cent-per-gallon blenders tax credit, R&D handouts, and other support. Like the Johnny Rocco character portrayed by Edward G. Robinson in the Bogart and Becall classic Key Largo, the ethanol lobby always wants “more.”

And there are always well-meaning politicians happy to oblige. Rep. Eliot Engel (D-NY) and Sen. Sam Brownback (R-KS) have introduced bipartisan legislation (HR 1476, S. 835) requiring each automaker to ensure that at least 50% of the vehicles it manufactures or sells are flex-fuel by 2012 and at least 80% by 2015. A flex-fuel vehicle is one that can run on either regular gasoline or E-85 (a blend containing 85% ethanol), or anything in between.

Supporters acknowledge that flex-fuel technology will add about $100 to the purchase price of a new car. But, they claim, this expense will be more than offset by the reduction in fuel costs. That’s an interesting theory. However, according to www.fueleconomy.gov, a Web site jointly administered by DOE and EPA, it costs hundreds of dollars more annually to fill up a flex-fuel vehicle with E-85 than with regular gasoline. No wonder so few people buy flex fuel vehicles!

When will mandatists learn? If the combination of flex-fuel vehicles and E-85 is such a great bargain, consumers will demand them, and profit-seeking companies will produce and deliver them for sale, all without regulatory coercion. Alternatively, if the flex-fuel/E-85 package is not a good buy, no amount of government meddling can make it so.

For further discussion, see my post today on www.Masterresource.org.

graphicconception May 6, 2009 at 11:55 am

Is America large enough to grow the crops necessary to make all the ethanol that could be consumed by those cars?

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