Oregon’s Ethanol Mandate: Failure by Design

John A. Charles, Jr.QuickPoint!

Within the last week, two major news stories have demonstrated why politicians should not try to plan the economy. First, Science magazine published the results of several studies showing that the mad rush to promote ethanol and other biofules as a tool for “fighting global warming” is generating a substantial net increase in greenhouse gas emissions. The studies found that clearing rainforest or grasslands for conversion to croplands (necessary as the feedstock for ethanol production) releases large amounts of carbon.

The second news story, published in The Oregonian, focused on the problems of Oregon’s new ethanol mandate, which requires retailers to blend gasoline with 10% ethanol. Unfortunately, ethanol has a tendency to separate from gasoline and settle to the bottom of fuel tanks when vehicles sit for a long time. The more concentrated ethanol then begins to corrode any material it comes in contact with. This is a particular problem for boaters, whose vehicles are typically not in use every day.

The state legislature is now considering an exemption from the new mandate for boats, airplanes, and off-road vehicles. It would be far better if they just admitted that the entire mandate was a big mistake and repealed it.

Legislators constantly think that they know more than the market knows. They don’t. The ethanol fiasco should serve as the latest reminder of that reality.

John A. Charles, Jr. is president and CEO of Cascade Policy Institute, Oregon’s free market think tank.

© 2008, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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