Marginal Utility

by Ken Houghton

From Knowledge Problem comes a report from Consumer Reports on "flexible-fuel vehicles" (FFVs) and the reality of Ethanol. They buried the lede of the bullet points; I correct this below

1. The FFV surge is being motivated by generous fuel-economy credits that auto-makers get for every FFV they build, even if it never runs on E85. This allows them to pump out more gas-guzzling large SUVs and pickups, which is resulting in the consumption of many times more gallons of gasoline than E85 now replaces.
   
   So automobile manufacturers are getting "fuel-economy credits" for making cars burn more fuel--and the ethanol besides.
   
   And it's not as if there is even a close competition.
   
   
2. The fuel economy of the Tahoe dropped 27 percent when running on E85 compared with gasoline, from an already low 14 mpg overall to 10 mpg (rounded to the nearest mpg). This is the lowest fuel mileage we've gotten from any vehicle in recent years.
   With the retail pump price of E85 averaging $2.91 per gallon in August, according to the Oil Price Information Service, which tracks petroleum and other fuel prices, a 27 percent fuel-economy penalty means drivers would have paid an average of $3.99 for the energy equivalent of a gallon of gasoline.
   
   There is your $1.00 ($1.08 at that level) per gallon gasoline tax increase, folks—except that it won't go to cleaning up the environment or making better roads or even general revenues to reduce other taxes. Worst of both worlds.
   
   
3. When we calculated the Tahoe's driving range, we found that it decreased to about 300 miles on a full tank of E85 compared with about 440 on gasoline. So you have to fill up more often with E85.
   
   That looks like a 32% decrease in actual fuel efficiency to me (140/440 = 31.818...).
   
   
4. Because E85 is primarily sold in the upper Midwest, most drivers in the country have no access to the fuel, even if they want it. For our Tahoe test, for example, we had to blend our own (see The great E85 fuel hunt [subscriber-only link]).
   
   That's right, folks. Once again, those of us not located in the "Upper Midwest" are subsidizing the rest of youAgricultural Conglomerates such as ADM and Cargill, as well as a few farmers in Iowa. And, since air pollution (of which more will be generated by vehicles using E85) is transported, we will also have our standard of living reduced.

In this context, I reiterate my defense (op. cit. here) that CAFE standards at least work from a measured, defined base. If Tom had known that the "alternative" was subsidizing the burning of more gasoline plus converted corn in the name of "fuel economy," he might never has written this post, except for this prophetic paragraph:

At this stage, it's too early to say whether the fuel economy rules will be an item for Jonah Gelbach's new Faint Praise series, or just plain damnation. Given the administration's proclivities, it's always safe to be on the lookout for the latter.

We have met the enemy, and he is us.