The Real Cost of Ethanol

Though environmentalists point out that it takes as much energy to produce a gallon of ethanol as can be had by burning it, producers such as Archer Daniels Midland have long benefited from a 54-cent-per-gallon tax break. Recently ADM has pushed national politicians for further breaks, including laws that favor ethanol-based products in the nation’s gasoline supply. During the 1992 presidential election, when George Bush was trailing Clinton, Bush proposed gasoline volatility standards that favored ethanol products as the additives to make the “reformulated gasolines” called for in the 1990 Clean Air Act. At about the same time Bush received a series of ADM payments culminating in a $400,000 check for a single fundraising dinner in April 1992.

When Bush’s prospects began to fade, Andreas started shipping money to Clinton, discreetly at first, then more dramatically once he was elected. (His total contribution of $270,000, as of mid-1994, makes him one of Clinton’s largest benefactors, according to Common Cause.) The largest installment, a $100,000 check for a presidential dinner, came in June 1994.

Clinton shied away from tampering with volatility standards, as Bush had. Instead, just days after receiving the $100,000 check, the Clinton administration simply ordered that 30 percent of the gasoline sold in America’s nine most polluted cities contain ethanol-based additives by 1996. Without the mandate, refiners were inclined to choose a clean-air additive made from methanol, a form of alcohol distilled from natural gas. (The methanol additive is cheaper and easier to get to market.)

Last year, another friend-of-Dwayne, Bob Dole, had the dubious honor of defending the 30 percent mandate at the very time he was trashing Clinton’s health care proposal for–yes–imposing mandates. In April, a federal appeals court blocked the implementation of the ethanol mandate, saying the Clinton administration lacked the statutory authority to discriminate between ethanol and methanol.

Go back to the rest of our report on corporate pork.
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