New CRS Report: How Corn Ethanol Mandates Have Hurt Ohio’s Environment and Economy

November 06, 2015

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(Center for Regulatory Solutions) Washington-imposed mandates that have forced increasing volumes of corn ethanol to be added to Ohio’s and our nation’s fuel supply have produced an additional 1.92 million metric tons of CO2 emissions in Ohio alone since 2005, the emissions equivalent of adding nearly 400,000 cars to the road in a single year. That’s one of the key findings of a new Ohio-focused report being issued today by the Center for Regulatory Solutions, a project of the Small Business and Entrepreneurship Council.

The report also includes the results of a survey that was recently conducted capturing the views and attitudes of Ohio voters. The poll finds that even without any information provided to respondents about the Renewable Fuel Standard (RFS) mandate, Ohioans were more opposed to the RFS and expanded ethanol mandates than supportive of them. Once introduced to several key facts about how ethanol has performed from an environmental standpoint over the years, those who initially supported the RFS and corn ethanol abandoned that position.

The report is being released in Ohio as a series of new television ads spotlighting the failures of the RFS continue to run across the state during the month of November. That ad can be viewed here.

“Our report puts the spotlight directly on the failures of Washington’s corn ethanol mandate for Ohio,” said Karen Kerrigan, President of CRS. “Supporters of corn ethanol promised economic and environmental gains from using corn in our fuel supply. Ten years later, we are left with broken promises and a lose-lose mandate for both the environment and the small businesses that power our economy. In fact, as this report highlights, the use of corn has led to higher costs and resulted in no gain for the environment. It should come as no surprise that environmentalists like Al Gore have called corn ethanol mandates a mistake. Now is the time to put aside a failed policy and repeal this costly Washington mandate.”

In July 2005, Congress passed and President George Bush signed the bipartisan Energy Policy Act, which established the Renewable Fuels Standard (RFS). The RFS created a set of mandates – known as Renewable Volume Obligations (RVOs) – that require ever-increasing volumes of ethanol to be added to the nation’s fuel supply. Supporters of the ethanol mandate promised a cleaner environment, enhanced energy security, and greater economic support for domestic farmers and rural communities across the country.

However, the targets set by Congress, which included a mandate for consumption of cellulosic ethanol, have proved elusive because converting cellulosic feedstock into usable energy is much more challenging than starch-based crops, like corn. Despite this setback, EPA administrator Gina McCarthy – whose agency is responsible for implementing the RFS – is pledging to get the RFS mandate “back on track” and eventually align its targets with congressional mandates.

As the report highlights, those speaking out against the corn mandate include diverse voices from across the country, from environmental advocates to pro-business groups. In Ohio, Gov. Kasich recently stated the RFS “needs to be phased out,” while Rep. Marcia Fudge (D-Ohio) and the Congressional Black Caucus have called for RFS targets to be eased because they have “resulted in higher prices for corn and higher prices for feed and food.” And as far back as 2007, the Central Ohio chapter of the Sierra Club called corn ethanol a “bust” because of the amount of energy it takes to produce, the associated greenhouse gas emissions, and the land and water impacts of increased corn production.

The CRS report spotlights research from the scientific community which has warned about the environmental impacts of corn ethanol since the mandate’s inception. In fact, these findings led the EPA’s Inspector General to announce on Oct. 15 that it would conduct an investigation into EPA’s calculation of the lifecycle environmental impacts of the RFS. The investigation follows years of media scrutiny of the RFS, which raised serious concerns about the impact of corn-ethanol mandates. In 2013, the Associated Press reported that the rush to plant corn “wiped out millions of acres of conservation land, destroyed habitat and polluted water supplies.” In 2008, TIME magazine concluded that ethanol “increases global warming, destroys forests and inflates food prices.”

Key Findings contained in CRS’s analysis:

The lower energy content of ethanol relative to gasoline (ethanol has roughly two-thirds of the energy content of gasoline) resulted in $440 million in additional transportation fuel costs for Ohioans in 2014. From 2005 to 2014, Ohioans paid more than $4 billion total in additional fuel costs due to corn ethanol. CRS’s analysis shows these unnecessary energy expenditures resulted in $4.8 billion in lost GDP, $2.7 billion in lower labor income, and the equivalent of 5,500 lost jobs per year.

Corn ethanol production and consumption has added nearly 1.92 million metric tons of CO₂ equivalent (CO₂e) emissions in Ohio from 2005 to 2014 – equivalent to the emissions of 398,000 cars in a single year.

Corn ethanol production and consumption in Ohio has generated an additional 5,000 tons of volatile organic compounds (VOCs) and 28,000 tons of nitrogen oxides (NOx) from 2005 to 2014. Both VOCs and NOx are precursor emissions that contribute to the production of ozone.

The lifecycle water demands of producing corn ethanol in Ohio averaged more than 4.5 billion gallons per year from 2008 to 2014, or the equivalent of the yearly water consumption of over 48,000 households.

The number of acres of land previously protected under Ohio’s Conservation Reserve Program (CRP) has decreased by more than 20 percent from 2008 to 2014, while the total number of corn acres planted have increased.

More than 8,500 tons of cumulative soil erosion have been recorded in Ohio between 2005 and 2014 as a result of mandates that encourage additional volumes of corn to be grown.

About CRS

The Center for Regulatory Solutions is a project of the Small Business and Entrepreneurship Council, a 501c(4) advocacy, research, education and networking organization dedicated to protecting small business and promoting entrepreneurship. For twenty-three years, SBE Council has worked to educate elected officials, policymakers, business leaders and the public about policies that enable business start-up and growth. READ MORE and MORE (Biofuels Digest) Download report

Excerpt from Biofuels Digest: The report is being released in Ohio as a series of new television ads spotlighting the failures of the RFS continue to run across the state during the month of November. READ MORE

Excerpt from the report: Ohio Gov. John Kasich (R) recently said the RFS “needs to be phased out” and the ethanol industry should “stand on its own.” This is stunning because Kasich is running for President and delivered these comments in Iowa, a major corn-producing state. Iowa is also the first, and among the most important, of the battleground states in the Republican Presidential nomination process.

U.S. Rep. Jim Jordan (R-Ohio), chairman of the conservative House Freedom Caucus, has said ethanol producers “should be able to stand on their own in the marketplace” and “I just don't believe the government should be subsidizing any alternative fuels.”

On the Democratic side, U.S. Rep Marcia Fudge (D-Ohio) and the Congressional Black Caucus have called for RFS targets to be eased because they have “resulted in higher prices for corn and higher prices for feed and food.” And as far back as 2007, the Central Ohio chapter of the Sierra Club called corn ethanol a “bust” because of the amount of energy needed to produce it, the associated GHG emissions, and the land and water impacts of increased corn production. READ MORE