Business is complicated. This week three Big Oil groups---the National Petrochemical & Refiners Association, the International Liquid Terminals Association, and the Western States Petroleum Association---asked District of Columbia U.S. Court of Appeals to overturn the Environmental Protection Agency's increase of the allowable ethanol blend in gasoline from 10% to 15%.
Who are these opponents of ethanol?
- NPRA lists among its members Koch Industries, whose exploration arm drills for oil in western South Dakota.
- Also in NPRA: Koch subsidiary Flint Hills Resources, which produces 220 million gallons of ethanol a year in its two Iowa plants, and Valero, which bought bankrupt VeraSun's ethanol plants and has said it needs no government subsidies to keep making ethanol.
- ILTA includes Magellan Midstream Partners, which has been working with South Dakota's Poet Ethanol to build a pipeline to carry corn whiskey for cars from Mitchell to New York. (That's got to cause some friction in the board room.)
Both Senators John Thune and Tim Johnson support E-15. So does Rep. Kristi Noem. But maybe the ethanol industry is right: maybe they are the underdogs against the Big Oil interests that don't want competition.
I'm against ethanol. It's a ridiculous "fuel" for our cars, especially when made from corn.
1. Net energy loser. Making 1 gallon of ethanol take more energy than it produces during combustion (from corn).
2. Fertilizers used to grow corn are crude oil derivatives.
3. We've been doing ethanol for 20+ years and it still requires massive subsidies. It doesn't look like it will ever be competitive.
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