Time to scuttle ethanol mandate

Another law a bad idea

Published December 11, 2005 at midnight

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Ethanol as a fuel additive may be here to stay thanks to federal tax credits and the high price of oil, but that doesn't mean it should be mandated by government as well.

Ethanol is back in the news because 1) The Air Quality Control Commission will consider a rule change Thursday that would eliminate the mandatory use of ethanol in metro Denver during winter months, and 2) there is a bill awaiting introduction in the legislature next month that would require all gasoline sold in Colorado to contain at least 10 percent ethanol.

The proposed rule change is way overdue. But the pending bill amounts to special-interest pandering.

Colorado first mandated ethanol during the winter back in 1988 because it was believed the additive would reduce carbon monoxide in major metropolitan areas. Since then the catalytic converters all vehicles must carry have been improved to the extent that ethanol is only marginally helpful, if it is helpful at all. The mandate has already been eliminated in Fort Collins, Greeley and Colorado Springs, and the season has been shortened to three winter months in the Denver area. It might as well be eliminated altogether.

Removing ethanol from the state implementation plan in metro Denver would end the Environmental Protection Agency's heavy-handed, paperwork-ridden role in enforcing it. Enforcement would be left to the state - unless the commission decides to end even its control, which is an option.

The proposal to end the mandate is being fought by the Colorado Corn Growers Association and the Ethanol Management Co., which blends the product into gasoline for many refiners. Of course their interests are economic although they prefer to couch their arguments in health terms. But their fears of change are probably groundless so long as gasoline prices stay high, corn prices stay low and refiners are entitled to the federal tax credits they now earn by adding ethanol.

The fact is, almost all Colorado refiners add a 10 percent ethanol mix year-round, not just in the winter, because it pays to do so.

According to Thursday's Wall Street Journal, ethanol production will continue to be profitable unless the price of crude oil drops below $30 a barrel.

So if refiners will use ethanol anyway, why not make it mandatory? Because there are times and conditions when its use is counterproductive. According to Stan Dempsey of the Colorado Petroleum Association, one refiner declined to use it last summer because it believed ethanol hurt performance. Another refiner refuses to blend it into gasoline shipped to mountain stations in any season for the same reason.

Finally, it is always possible that corn prices will eventually soar and gasoline prices drop. Then mandating ethanol would cost every motorist hard cash.

Ethanol should be used when it's economically or environmentally sensible, not because an interest group wants to protect its market share. Let there be no ethanol mandates, by rule or by law.

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