Hindsight is 20-20: Ethanol Gas 7 Years Later

Back in 2007, Marianne Lavelle and Bret Schulte of U.S. News & World Report published an overview of the ethanol situation in the United States ("Is Ethanol The Answer?"). It's always interesting to look back in history on pieces like that and see how the view at the time corresponds with what we know about how it really was.

In 2006, the Renewable Fuel Standard - legislation passed by Congress mandating certain numbers of yearly gallons of renewable fuel in the nation's fuel supply - was kicking into full gear. The RFS mandated that by 2012 (hey, that's this year!), the total volume of ethanol in fuel would have to double. Did they meet their goal? Analysts expect ethanol volume in the US for fuel to be 15 billion gallons, up from 3.9 billion gallons in 2005. So it appears so. That's an awful lot of ethanol in gas. And an awful lot of ethanol gas problems for consumers of all kinds.

It's also kind of ironic to note that the 2005 perspective was that of shock and surprise at the news that about 20% of the corn supply in 2005 was being diverted from traditional uses to making fuel.  Now that figure is over 40%, and prices for food and other things that used corn before are going up. This was despite politicians like Tom Harkin promising that ethanol use would not lead to spikes in the price of corn.  It wouldn't be the first time that promises from politicians fell flat.