The Unintended Consequences of Biofuels

Location: The Heritage Foundation's Allison Auditorium

In 2005, Congress passed the Energy Policy Act, mandating that renewable fuels be blended with gasoline as a replacement for MTBE (methyl tertiary-butyl ether).  The renewable fuel of choice, ethanol, was trumpeted as the panacea for America's energy and environmental problems: it would reduce America's dependence on foreign oil and reduce carbon dioxide emissions.  Proponents also claimed that the ethanol mandate would revive America's farm belt, as the country grew hungry for more biofuels.  Fast forward to 2007, Congress is busy writing another energy bill, working on two-year-old assumptions.  The new bill would expand the ethanol mandate five-fold, relying on a mix of conventional biofuels and unproven cellulosic technology.

While the biofuels lobby and proponents in Congress continue to laud the benefits ethanol and other biofuels, there is mounting evidence that the ethanol mandate has become more of a problem.  Wide ranges of groups have begun questioning the value of the ethanol mandate because of the tremendous ripple effect on the global economy.  Not only has the mandate failed to lessen America's foreign energy dependence and reduce greenhouse gases, the global food supply has been drastically altered, livestock farmers are struggling to deal with the increased price of feed, and numerous environmental and sustainability issues have emerged.