It figures that when the Bush administration finally decides to make a bipartisan gesture on the environment, it’s to implement a bad policy long supported by both Democrats and Republicans. The Environmental Protection Agency today denied California Gov. Gray Davis’ plea to waive the Clean Air Act’s minimum oxygen requirement in gasoline, which, in the wake of Davis’ sound decision to discontinue use of the oxygenate methyl tertiary butyl ether (MTBE), which was contaminating the state’s water, could be fulfilled only by using ethanol. As Davis pointed out in a May 22 letter to President Bush,
Numerous assessments by government agencies, automotive companies and fuels industry experts confirm that a minimum oxygen content is not essential to making reformulated gasoline that meets all emission reduction requirements. Therefore, application of the current minimum oxygen content requirement serves absolutely no purpose in California relative to its intended air quality rationale–to reduce ozone precursors and toxic emissions from vehicles. … Without the waiver, California consumers will pay a minimum of $450 million more a year for reformulated gasoline. A waiver would allow refiners and marketers to use reduced quantities of ethanol during periods of time when supplies are inadequate to meet demand. Supply disruptions can result in a rapid increase in gasoline prices that can persist for several weeks and result in costs to California consumers of nearly $650 million per month.
Davis’ low enthusiasm for ethanol is shared by environmentalists. California Rep. Henry Waxman, who helped write the Clean Air Act, told the AP, “It really is an unbelievable decision. It’s incomprehensible to me, because if the waiver had been granted, it wouldn’t have any environmental consequences because the Clean Air [Act] requirements would still have to be met.” The Natural Resources Defense Council is no great ethanol fan either. It points out,
[E]thanol production from corn in the U.S. is economically viable only due to a federal tax subsidy. Prospects for lowering costs on and expanding ethanol production are limited due to the high level of inputs required to produce agricultural crops (e.g., fertilizer, pesticides, tractor fuel) and the resulting high cost and substantial environmental impact.
So why is the Bush administration forcing ethanol down California’s throat? In all likelihood, to pacify Senate Democrats! The new Agriculture committee chairman, Iowa’s Tom Harkin, is a strong ethanol supporter because ethanol is made from corn. For the same reason, so is the new Senate majority leader, South Dakota’s Tom Daschle. The bipartisan tsunami of political cash that has flowed over the years from the country’s biggest ethanol supplier, Archer Daniels Midland, and its chairman emeritus, Dwayne Andreas, combined with the fact that Iowa casts the first presidential vote, have long guaranteed that a sufficient number of non-farm-state politicians will also support pro-ethanol policies. (Most disappointingly, Bill Bradley abruptly dropped his longstanding opposition to ethanol subsidies when he ran for president last year.) In Bush’s case, it can scarcely have escaped his (well, perhaps, Dick Cheney’s) attention that ADM shoveled $410,000 in soft money to Republicans during the last election cycle, and that it spent an additional $100,000 to help fund Bush’s own inauguration. ADM produces about half the country’s supply of ethanol and, Scott Kilman reports in today’s Wall Street Journal, ethanol is responsible for about one-third of the company’s profit. By substantially expanding the ethanol market, the EPA’s decision will improve ADM’s ability to keep political donations flowing. But it won’t do much to reduce air pollution.