Drivers, You’re Getting Hosed at the Pump
If you drive a gasoline-powered vehicle, you’re getting hosed at the pump – but not because of the Iran affair.
Iran is temporary, and, besides, prices have already dropped significantly. The national average gasoline price on June 27 was $3.8780 per gallon. It peaked at over $5.00 during the Biden administration.
But, if you’re still upset about a temporary spike in gasoline prices, you should be angry that the government’s 10 percent (E-10) ethanol mandate in gasoline has been hosing you for more than twenty years.
Americans are paying dearly for the renewable fuel mandates contained in the 2005 Energy Policy Act and the 2007 Energy Independence and Security Act.
The 2005 Energy Policy Act directed the Environmental Protection Agency (EPA) to work with the U.S. Department of Energy, the Department of Agriculture – “and stakeholders” – to design and implement the program. The stakeholders to which the legislation referred did not include any taxpayer watchdog organizations, but, revealingly, they did include interests who stood to benefit financially from the mandates: politically-generous agricultural interests and renewable fuel investors and refiners.
The mandates were never about energy. Ethanol is all about producing cash – but not for you.
The Energy Policy Research Foundation has estimated that corn-based ethanol and related requirements are costing a typical American family of four more than $700 in fuel costs annually, about $60/month.
The energy value of ethanol is only about 70 percent that of an equivalent volume of petroleum-based motor fuel, so a full E-10 blend reduces mileage on a tank of gasoline.
Even though environmental activists and climate zealots initially promoted biofuels, corn ethanol may actually require more energy to produce and transport than it releases when burnt, and burning it may damage the environment.
It’s impossible to distill all the water out of corn to produce ethanol. Water’s corrosive properties require different materials to transport ethanol, so it can’t be put into pipelines like oil. It must be transported in stainless steel tankers from farmland to ethanol refineries to blending stations. The tankers burn diesel fuel, increasing the demand for diesel.
Ethanol evaporates more quickly than gasoline, so it increases smog emissions, and refining it usually involves burning conventional fuels such as coal or natural gas.
The EPA admitted years ago that burning ethanol significantly increases ozone precursor emissions. Furthermore, the overuse of farm fertilizers, pesticides, and water encouraged by corn ethanol mandates increases agricultural runoff, corrupting rivers and streams and straining limited water resources.
In short, not only does ethanol lack an environmental benefit, but it may actually worsen the environment.
If providing renewable fuels was the true objective of the politicians who passed ethanol mandates, Congress would not have excluded imported ethanol from the domestic market. Brazil’s sugarcane-based ethanol, the world’s most cost-effective, cannot be imported. Sugarcane does not require expensive prior distillation of corn to sugar.
Moreover, ethanol mandates not only artificially inflate transportation fuel costs, they inevitably mandate higher food prices, too.
Because American ethanol producers and the food industry compete for the same commodity – corn – the ethanol mandate increases the total demand for corn and, accordingly, food prices. Because the poor spend a larger portion of their income on food, the effect of the ethanol mandate is a regressive tax on consumers.
Ironically, but unsurprisingly – it is the federal government, after all – both corn growers and ethanol refiners are receiving taxpayer-funded government subsidies.
The agricultural lobby is among the most powerful in America. Farm interests have been receiving row crop subsidies or related benefits for corn since the 1930s, so the ethanol mandate increases financial opportunities for large farmers. Ethanol refiners get their cut, too. Refiners receive per-gallon federal credits to make their product competitive as a volume replacement for carbon-based fuel.
The cost of energy affects the entire economy; gas and diesel prices are a major economic cost factor; so transportation fuel costs influence the prices of every product, every service – everything we buy.
The “bipartisan” Washington politicians who passed the ultimately-misguided renewable fuel mandates claimed they were “doing something” about what they allegedly perceived as an uncertain energy market.
But, if supply were really the problem, a simple policy could have solved it: “Drill, baby, drill!.”
America finally did drill, and, today, the nation is energy independent.
Renewable fuels are an expensive grift.
End the ethanol mandate.
https://www.pottsmerc.com/2026/06/28/jerry-shenk-drivers-youre-getting-hosed-at-the-pump/
