The Corn Lobby vs. Orange Man

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The corn lobby – which benignly styles itself The National Corn Growers Association – is upset with the Orange Man for – as CNN puts it – “reducing demand” for its crops.

What he’s actually done is reduce the mandate for them by granting waivers to refineries which would otherwise by forced by a federal law called the Renewable Fuels Standard or RFS to douse the gas they make with ethanol – which is made (in the United States) using mostly  . . . corn.

Almost all of the “gas” sold in the United States actually contains 10 percent ethanol (E10) because of the regs that require, not because American motorists want it. If they did want it, there would be no need for the mandate.

Which mandate puts a lot of corn into American motorists’ tanks – and a lot of money into the pockets of the corn lobby.

Every gallon of E10 sold includes a 10 percent subsidy to the corn lobby, or about 15-20 cents per gallon. This amounts to about the same sum as the federal gas tax of 18.4 cents per gallon, but with the latter American drivers get something desirable in return for their money – the roads, without which their cars wouldn’t be much use – which they’d probably pay for without being forced to, while the Corn Tax is simply a transfer of wealth from American drivers to a very politically powerful and parasitic “industry” that depends on government force to keep it in business.

Ethanol is a product without a natural market – which is why the corn lobby had an artificial one created for it, using the political power it wields in farms states to apply pressure to candidates for office to support laws such as the Renewable Fuels mandate. It’s no different in principle than the “zero emissions” mandates in place in states like CA, which created an artificial market for electric cars by imposing a requirement that a certain number be sold each year.

The chief difference – for now – is that Americans aren’t forced to buy an electric car. But the corn lobby has succeeded in sluicing corn juice into almost all of the “gasoline” sold in the country.

It is still legal to buy real gas (without ethanol) just as it’s still legal to buy real Coke (with sugar rather high fructose corn syrup) but you have to go out of your way to find it. There are only a relative handful of stations – see here, to find some – that sell real gas because of the pressure on the system to produce and sell ethanol-laced gas.

The two products have to be pipelined/shipped/trucked/stored separately, which makes things more involved, which makes things more expensive. It’s cheaper to sell just (or mostly) the ethanol-laced gas – just as it’s cheaper to sell Coke sweetened with high fructose corn syrup but only – in the case of E10 – because of the artificial incentives created by the mandates and the compliance costs they impose.

And it’s actually not cheaper.

While ethanol-lacing may reduce the cost of a gallon of “gas,” that “gas” costs Americans in several other ways that aren’t immediately obvious.

First, ethanol-doused gas reduces gas mileage – because it doesn’t pack nearly the same energy punch that 100 percent gasoline does. It takes 1.5 gallons of pure ethanol to equal the energy content in BTUs of 1 gallon of unadulterated gasoline.

The more ethanol in your “gas,” the lower your gas mileage.

This can be compensated for to some degree by designing an engine specifically for ethanol-laced fuels (which have higher octane) using very high-compression and turbochargers to increase cylinder pressure – but this increases the cost of new cars built with engines designed to take advantage of the higher-octane/ethanol-laced fuel.

And the fuel is a clear net loser when burned in cars not designed specifically to burn it – which amounts to millions of cars still on the road and especially cars made before the early 2000s.

The government itself admits that E10  “gas” reduces MPGs by 1.5-3 percent on average – a reduction significantly greater than the gains achieved by fitting new cars with engines that turn themselves off whenever the car isn’t actually moving (ASS) and leaving aside the add-on cost of such technology and the down-the-road costs in terms of maintaining the system and more frequent battery replacement due to the much-increased workload of serial re-starting of the engine placed upon it. Once people start to see these, they will never forget.

In addition to using more gas, using ethanol also creates more gas.

If a car burns 1.5-3 percent more fuel by volume to go a given distance, it will “emit” proportionately more of the dread gas, carbon dioxide. Why aren’t environmentalists “concerned” about this?

The corn lobby may soon find Greta directing her crazy eyes in their direction.

But for now, the corn lobby is very angry that the Orange Man has dialed back the manufactured “demand” for its product. It sent him a letter expressing “frustration” with the president’s decision.

This is the “frustration” felt by a raccoon stymied by one of those lockable garbage can tops.

The letter demands the Orange Man “follow the law” – that is, not question the forcible transfer of wealth from the pockets of American drivers into the coffers of the corn lobby. It wails about the “reduced corn demand due to lower ethanol blending and consumption and a rising number of ethanol producers slowing or idling production.”

Outrageous!

The American driver owes the corn lobby a living, it seems.

It goes on to wheedle about the “harm caused by the waivers ” . . . but what about the harm caused to American drivers?

It insists that the OM “restore integrity” to the renewable fuels mandate by rescinding the 85 waivers he has granted to refineries around the country.

What the Orange Man ought to do is make them permanent – and general.

If people want E10 – or E15 or E100 – let them buy it.

But force no one to buy it.

This would articulate the principle that it’s not the proper business of government to “help” any businesses that can’t make a case for their product or service on the merits.

The choice isn’t between “renewables” and real gas.

It’s between a kleptocracy – and a free market.

. . .

Got a question about cars, Libertarian politics – or anything else? Click on the “ask Eric” link and send ’em in!

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74 COMMENTS

    • Thanks for posting that, Brian!

      I’m lucky in that there’s a station in my town that sells real gas. Worth the 12 mile drive. I fill up my five jerry cans there and it keeps my generator and power equipment in ready-to-run condition.

  1. I live in the middle of corn land. My property is surrounded by it and there’s a gigantic ethanol plant off in the distance. I’ve railed against ethanol in the local paper and gotten Big Corn on my case for my trouble. I’ve had fuel systems messed up by the stuff. Could you provide a link for the 10% subsidy for ethanol? I’ve tried to do due diligence over the years concerning ethanol and subsidies, but if there’s something else going on other than the complex RINs and RFSes I’d sure like to know.

    • Hi Ross,

      The RFS is a production – and purchase – mandate. A certain volume of ethanol must be put into the fuel supply; it’s analogous to “zero emissions” mandates. The RIN thing is similar to the carbon credit thing. You can buy/sell RINs like carbon credits.

  2. My grandmother had an electric lawn mower many years ago. It actually plugged into a socket. Ran OK until you encountered a blade of grass over 3 inches high. Didn’t know someone was still making them. Are these Lowe’s products battery operated?

    • I “inherited” a corded electric mower with a house we rented for several years. The thing was so weak and a pain in the ass with the cord that I went out and bought the cheapest 3.5 hp B&S mower that I could find. You could cut circles around the electric mower with it and only use a couple gallons of gas per season.

      Dumb me – I left it at a house we sold since by then I had bought a 6.5 hp “big wheel” mower. The little one was still running after mowing a half acre lot for several years.

    • We got our first electric lawnmower in the 50’s. That thing would eat anything regardless of size of thickness. It made gas mowers look like wannabe’s. Our next in the middle 60’s(didn’t think that first one would ever quit)was just about the same but had a lot more lawn to mow.

  3. Since 2008 when ethanol was mandated in Florida, I have never used it in anything. Marathon installed a Rec fuel rack at the port and all the marinas and many local stations carry this 90 octane non ethanol fuel. I am a old car collector and have boats. I keep 100LL avgas in all the old cars, mowers, saws and NEVER have stale fuel even after sitting years. The ethanol mandate is a criminal conspiracy. Glad Trump is doing something about it. But the subsidy is about 45 cents. Ethanol in gas is a destroyer of engines and if you have a steel vented fuel system it will rust out everything. If it sits more than 1 month it begins to phase separate and becomes toxic to an engine. If it is left open to ambient air, such as leaving the gas cap off or a boat with a tank vent, it absorbs water and phase separates to form toxic sludge. Older boats with fiberglass tanks, it attacks and dissolves the resin of the tank! It embrittles all plastics. Ethanol in gas was tried back in late 70’s. It flopped and not all the communist propaganda from hell can sell it on a free market. It is a destroyer.

  4. Good points Eric. Another consequence of using ethanol for fuel is increased food prices, because of less land available for food production. Hard to say what is worse, one way or the other it’s a racket. As for Greta, she was outed just recently as an actor and a fraud, have a look here: http://mileswmathis.com/greta.pdf

    • A decade ago there were riots in Mexico because of lack of corn since they get a great deal of their corn from the US and there wasn’t enough to feed them and make ethanol.

  5. A QT gas station opened near my house recently in Central Texas. They have ethanol free “regular” gas. I’ve been using it for a couple months now. So happy to have that option instead of E10. My car thanks me for it.

    Great article!

  6. Is all the military BS in the Persian Gulf,Saudi Arabia,etc etc a subsidy??????? My 2017 Ford Focus gets 30 mpg on E85. and it’s about 80 cents a gallon cheaper the E0 87 octane here in Iowa. In Paducah KY I had to add some E10 to get to the next E85 pump. Figured it was about E30(probably the best as far as energy content and high octane characteristics), going slightly uphill, no wind and the readout went up to 42 mpg. Somehow I don’t think 87 E0 would get 50 mpg. Eric, the cheapest E85 I’ve put in in recent years was at Wytheville VA at the Sheetz—-$1.40. 2000 Buick and 1992 Toyota still going strong after ten to fifteen yrs of E30. One other thing, you diehard E0 fanatics assume with energy content—— every single molecule is being burned in the combustion chamber—–DREAM ON!!!!!Clover

    • Hi Martin,

      The “military BS” in the Middle East is about funneling money to the “defense” apparat, to serve as Israel’s pitbull – and to keep world oil prices artificially high.

      PS: Your verbiage is interesting. “E0,” I mean. Never heard of that. It’s just gas. Your verbiage implies that the default is ethanol (“e” whatever) adulterated to whatever degree.

      I’m only a “fanatic” about people forcing me to do things – and buy things.

      It’s interesting that ethanol defenders such as yourself always skip around that point.

    • I thought the Focus was rated at 40 mpg on the freeway with regular gas. The EPA tests are done on cars filled with regular gas, not E-anything.

        • Hi Martin,

          30 percent ethanol (even 15 percent ethanol) requires entire fuel systems designed specifically for it, which means higher cost as well as higher consumption (and higher “emissions,” if you consider CO2 an “emission”).

          I return to my foundational argument, which I wish you’d deal with:

          If ethanol is so wonderful, why is it necessary to legislate its use?

          • Eric, I think after 18 yrs for the 1992 Toy, 10 for the 2000 Buick, and 16 for the 1995 Ford Aspire, I’ve proven that no fuel system mod’s need to be done. The anti corrosion additive that ethanol plants add fixes the problems of incompatibility. Ethanol is even being piped from Tampa to Orlando by Magellan I think. If you were an oil company would you willingly sell the competition’s product. A Corn Grower Assoc friend told me the other day that an oil company guy told him that oil will give in to 10% ethanol volume but not one percent more. The gov’t would never allow stand alone 100% ethanol stations for people like me that would make the effort to use maximum ethanol blends. I do agree with you on Israel and feel we should let them and oil go it on their own!!!!

            • Martin,

              Your anecdotal assertions are just that. How about some facts? For instance, the fact that every car manufacturer explicitly warns that warranty coverage will be void if more than E10 is used in any vehicle not specifically rated/designed for higher concentrations of ethanol (e.g., “flex fuel” compatible)?

              There is also the fact that ethanol contains much less energy than gasoline, is more corrosive and doesn’t store as well.

              And the central fact: Ethanol is pushed on us by force. If ethanol were the superior product you claim it is, why is it necessary to require it?

              And why do you keep evading this point?

              I’ve asked you three times now, at least…

              Debating you is very like debating EV people – who always dodge the issue of mandates and subsidies.

              • Eric, all I know is personal experience but…… just found a picture from 2005. It is of the first blender pump to dispense ethanol and was at a cardtrol type station that Utica Energy, an ethanol plant just west of Oshkosh WI, built to direct market their ethanol. You could push a button for 10,20,30, and 85% ethanol. They put up numerous stations like that in Wisconsin and after a few years, the WI Petroleum Marketers Assoc had them shut down because of minimum mark up laws because they sold too cheap. That my friend is how your wonderful oil industry works.

                • Martin,

                  Your argument makes no sense.

                  Again: If ethanol is the boon you claim it to be, then why is it necessary to force-feed it to people? Why does the corn lobby so violently defend the RFS mandate?

                  And they ask me why I drink . . .

                  • Eric, what can’t you understand? The Petroleum Marketers said you can’t sell fuel so cheap because you cut out some middlemen. Do you think minimum markup laws are okay???????

                    • Try starting your carbureted car (like mine) with 30% ethanol when it’s 30 below zero Fahrenheit. Good luck.

                    • Me and Evan Williams and his White Label are best friends.

                      I found a liquor store that sells it for $28.99 a 1.75L bottle and another 100 miles away that sells it for less. But Pinkie’s sells a case for $151 cause you buy 5 and get 6. I’ll drink to that.

    • Hey Martin, I bet you just love all those wind turbines ruining the landscape near Paullina also. Anything to get the Government take money from others and put it in your pockets as subsidies, right?

      • I don’t have any and my landlord didn’t sign up in time to get any. I actually think they look okay but do make sure I keep track of where they are when flying my airplane around looking a fields. They seem to be turning most of the time.

  7. The blame lies squarely in the hands of politicians who buy into this chicanery. Anything to get the bucks to support re-election at the expense of the voter. These idiots strap us with this garbage and then beg for our votes. Ethanol serves no purpose in the gas supply. So why is it used? Because the vain and stupid are in charge. Then again, most people just go along with whatever because even though you change the politicians, the system still screws you no matter. I am so looking forward to the country blowing up and all the corruption is washed out to sea. But Greta, you can stay because we are going to need a pissed off psychopath to remind us not to go back to the old.

    • Hey, plain gasoline won’t work. That’s the reason my best friend and I were always going by the well with the separator and getting the “white gas” it produced. Those pickups ran fine on it.

  8. Hey Eric,,, Just read about Tesla’s new “Smart Summon”. It allows the owner (note I did not say driver) to summon their car in parking lots and other situations. Can anyone imagine several of these Tesla’s running around the parking lot,,, Where’s the Saaaaaafffty?

  9. ‘Electric cars.’

    Heh. No such critter.

    It’s a ‘nuke/oil/naturalgas/coal’ powered car.

    Unless’n ya got a few acres of solar panels in your backyard.

  10. I find it morally abhorrent that we use food for transportation. I suppose in the horse and buggy days we did the same thing, but hay can be grown in less than ideal locations. But when there’s no need and hungry people in the world what the hell are we doing? Unless it’s one of those conspiracy theories to control population…

  11. I’m in the middle of the “Big Corn Industrial Complex” in Iowa and can attest to their constant whining and gnashing of teeth anytime someone talks about ending the subsidies (The RFS is a subsidy) and going to a more market based approach. They just idled an ethanol plant near me and blamed the waivers, but I call bullshit because it is a political stunt to score points for the ethanol lobby.

    If there was a real market for corn squeezins’ in our tanks they would not need the RFS. I predict there will be a man from the Primghar/Paullina Iowa area in this comment section before long touting the greatness of ethanol. He has commented on your articles before and is a major player in the industry. Just google his name when he shows up and you will see, unless he uses a Nom De Plume since I just called him out.

    • Hi Guerrero!

      As you’ve already noted, if ethanol were as wonderful as some say, then why the need to force it on people? Starbucks doesn’t rely on the government to “sell” its coffee. Sink or swim – on the merits, as determined by people’s willingness to give you there money.

      • Totally agree eric. Bring all the military home from the Middle East and let the oil companies figure it out for themselves!!!!!!!!!Clover

        • Amen, Martin!

          Remember: We don’t need oil from the Middle East. The US is on track to become a net exporter of oil… provided they don’t get rid of the Orange Man…

      • Eric,

        It’s not just ethanol. I can’t find diesel in my area that is not adulterated with soybeans anymore. Why aren’t we given a choice anymore, instead of being forced to buy Bio-diesel?

        • Biodiesel has great lubricity properties and burns cleaner. I Had a 2006 VW TDI that I burned quite a bit of B50(50 %). I got an E85 Focus in 2012 and my cousin bought the TDI. It is still running good so the biodiesel must not have hurt anything.

          • That’s not the point. As the consumer I want to run 100% petroleum diesel, and I don’t have that choice anymore. If I really had a choice I would prefer to run a pre-2007 normal sulfur content diesel fuel.

            It’s not your right to pressure the government into taking my right to purchase the products I desire away from me, because of the benefits it bestows upon you.

          • Martin,

            Biodiesel is one thing, ULSD is another thing. And a third thing is forcing people to buy anything. You keep arguing the benefits – as you see them – of ethanol, et al. Just as EV fans tout the things about EVs they consider meritorious. But you both insist on foisting what you prefer on others rather than leaving people free to buy what they prefer.

            That’s the real issue here.

  12. E85 is a good substitute for race gas (provided you have a tune for it) but it doesn’t make much sense for anything else. Anything that sits for long periods of time should use E0.

    • Hi WF,

      Ethanol is like electric cars – each has its merits. But that’s not the point, of course. The issue is whether the government has any business forcing people to buy/use them, or to “help” manufacturer them. I say no – but of course, I’m a Libertarian kook who doesn’t believe its defensible to commit aggressive acts against peaceful people!

      • Oh I agree about getting rid of the subsidies. Corn isn’t even that good for humans as food, but that’s another story entirely.

        I had a spreadsheet for E85 and essentially you need to get it 30% cheaper than E0 to break even. That price is only possible due to subsidies, so I’m sure it makes even less sense with the real cost factored in.

        You could maybe justify an ethanol plant as a way of converting excess electricity into an easily storable liquid. But even that is a stretch because we don’t have a lot of excess power generation (apart from the grid idling down at night) looking for a place to be stored.

  13. There is no legitimate federal authority for forcing the addition of ethanol into gasoline and no legitimate authority for presidents to have their uninformed opinions have the force of law.

    Tenth Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

  14. I lived most of my life in a 90% corn ag state. Only rurals in ag states vote Republican. They only slightly outnumber the urban potheads who vote for Marxist pinheads. Trump can’t win the electoral votes of ag states if enough rural voters hate him for taking away their precious welfare money. The Ag Lobby will certainly do the Electoral College math for him, and next week, The Trump will be back “in the tank” for ethanol (heh heh).

  15. I never put ethanol-laced gas in my car. I get 4-5 more MPG on the 100% gas which offsets the higher price and my cars last MUCH longer. I don’t remember the last time I had to replace a car with less than 350K on the odometer–and I’m in the limo biz. http://www.pure-gas.org is a great way to fine ethanol-free gas.

      • Eric, I recently replaced the junky Briggs engine that came on my string trimmer mower with a Honda. The mower’s throttle control did not have enough travel to activate the new engine’s kill switch at the lower end. I didn’t even notice it until I started using avgas in all of my small engines. With the ethanol gas, the engine would just die on its own at low speeds. Now it idles so well I can’t get it to stop!

        • That dying problem is fixed with Amsoil 2 cycle oil. I’ll never regret using it….plus it takes have the amount of oil compared to non-synthetic.

    • I have a V-6 twin turbo that does just fine with ethanol compared to real gas. Winter blends actually do 5%+ worse with ethanol, but summer blends often do better with ethanol, depending on the brand of gas–which never used to matter, but sure as hell does today! But these Obama-era engines have very little performance history to study, so maybe mine will be shot after 150k. But thanks to ridiculous subsidies (of 30-40 cents per gallon), my total pump costs are lower with ethanol, winter or summer.

      • Glad to here you too get decent mileage. Not sure where you get the 30-40 cent subsidy idea. There is no money just the mandate oil companies blend X amount of gallons a year. Doesn’t say E10(10%), just gallons any way they can sell it. Now, the small refinery waivers are really biting into the total yearly usage. Even big outfits like Exxon Mobile are getting waivers for some of their small refineries even though they’ve never made so much money as a company. Sure wish Eric could put in a stint on an aircraft carrier in the Persian Gulf making sure the tankers come and go with the oil we don’t need.

        • Plenty of oil flowing through the Dakota Access Pipe Line, and there is talk of putting in more pumps to increase the pressure sending even more of this domestic oil to the refinery.

          “There is no money just the mandate oil companies blend X amount of gallons a year.”

          No money? This is creating an artificial demand, which drives up the cost of your precious and puts more dollars in your bank account at the expense of the free market. I sure wish the government would mandate that citizens had to buy a certain percentage of my products.

    • I live in the state of Oklahoma right now. Here, most pumps are ethanol free. Objectively, I can’t tell a difference in gas mileage with ethanol vs non ethanol. I’m not sure why. The difference should be 3% based on BTUs. I do find, that since my Lexus is designed for premium gas, but can run on regular, that I get about 2-3 mpg higher on the freeway using premium. On the Mustang, there is no difference as it is designed for regular.

      Pure gas in lawn equipment is a differnet story. I would do the same thing.

  16. Eric, do you know whether the EPA gas mileage stickers on new car windows represent the gas mileage when burning 100% gasoline, or E10? I suspect it’s going to be on real gas, then in the real world, we get even less due to the E10.

  17. That stuff is terrible for the fuel system in your cars whether newer or not and especially lawn equipment. I see people buying the canned ethanol free in Lowes Depot. (they’re the same). Comes out to $25- $30 a gallon…. Wow…. and right down the road is a station that sells 91 for $3.

    Speaking of Lowes,,, Went there a week ago, they had 8 or 9 EM’s (Electric Mowers) and one gas on display. Looks like the electric BS is gaining traction. If you want a gas mower, better buy it soon. I am waiting for the Electric Zero Turns, etc.

    I have curtailed my motorcycle rides as my GL650 and KZ1000P will not tolerate them. The Road King supposedly will but I don’t trust the manufacturing companies anymore as their in bed with Corpgov.

    Watch out for those lists that claim a business sells ethanol free. Anyone can add a name to the list. Several stations in our area are claimed to have it and don’t.

  18. Thanks for the education Eric. I didn’t know it was that bad.

    There’s another issue I would like to know about.
    In a rural place we visit, you can get ethanol free gas. It comes in the premium selection, and can be 90-92 octane and is much more expensive than E10. I use the non-ethanol for the engines that sit a lot and I can start them up 6-12 months later with no issues.
    In my home state, very urban, we can not get E0. We recently had a fuel supplier expand from their rural area to our urban area and their plan was to install a E0 pump(s). Us locals cheered. But, the state told them no way. Why?

        • That is probably because NY State is counted as an ozone non attainment area under Clinton-Bush era EPA designations. It is likely that they only permit oxygemated fuels. Prior to 2004, oil companies put MTBE in the fuel to get the proper oxygenate. In 2004, they began requiring ethanol. Of course, that spread nationally after the renewable fuel standards were implemented and ozone non attainment areas spread. Some states like Oklahoma are not large enough to qualify as non attainment areas, so there are small exceptions to the rule permitted

  19. Living here in Eastern South Dakota the corn welfare parasites are a very strong lobby and is worshiped like the gods they think they are. In about a 25 mile radius of my apartment I can think of 8 ethanol refineries, all smelling like a moldy brewery. The propaganda on the local radio stations are appalling, pushing the benefits of ethanol in your car/truck and gas powered machinery. There are a lot of tax subsidy money flowing here, the farmers seem to have a lot of new combines and tractors and other related farm machinery.

    • The “benefits” of ethanol to gas-powered machinery, what a joke. What the hell are they smoking? The stuff plays havoc with small engines, especially the 2-stoke engines found in older equipment.

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