March 20, 2008

Should We Let The Market Decide On Ethanol?

Having spent quite a bit of time debating the various issues surrounding ethanol on forums and reading many articles on ethanol, I can tell you that 'let the market decide' is a phrase that gets thrown around pretty often.

The argument is that the government should end the ethanol import tariff, blenders credit and mandates, and the free market would decide whether or not ethanol is worthy. It implies that consumers would be given a choice and ultimately the ability to decide the fate of ethanol.

The problem with this line of thinking is that so many of the stations are controlled by the oil companies, either through direct ownership or through supply agreements that limit independent stations from buying fuels from other sources. So if the oil companies weren't willing to provide ethanol to consumers, there would be no choice.

To carry the thought a little farther, have we ever had a choice as to what was in our fuel before? Did we have any choice whether lead or MTBE was in our gasoline? No, the oil companies decided to use them, and consumers had no choice.

I am all for consumer choices and from my perspective ethanol and biodiesel are the only to options that allow choice. Between home and work, I pass by 12 gas stations and only two of them sell an ethanol blend of gasoline. Two stations isn't a lot but it allows me a choice where as little as three years ago I had none at all.

Don't be fooled by this argument. It is not about consumer choices, it is about giving oil companies a choice of whether or not to use ethanol. And I think we know which way they would choose.

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