The Daschle view
Former senator Daschle says the critics are wrong.
In brief comments to Automotive News, he said claims about the energy needed to make ethanol fail to acknowledge the energy that goes into producing gasoline.
"It's an unfair comparison unless you look at the energy inputs that are also consumed in the production of petroleum," he said. "You can't compare ethanol production against a vacuum. You've got to look at what the energy inputs are for petroleum and what the energy inputs are for ethanol."
A fair comparison favors ethanol, Daschle said.
Further, the critics' arguments about government subsidies don't recognize the tremendous amount of government support behind the petroleum industry -- including the high cost of military operations to keep oil flowing from the Middle East and other trouble spots.
Daschle, now a fellow at the Center for American Progress, a liberal Washington think tank, advocates overhauling the corporate average fuel economy program, called CAFE, into a carbon alternative-fuel-equivalent program. It would further encourage ethanol use.
Petroleum lobbyists argue that the time has come to say "enough is enough" to government underwriting of ethanol.
Phil Sharp is in a position to provide objective refereeing of the debate.
As a member of Congress in 1988, he co-wrote the law that gave automakers CAFE credits for producing flexible-fuel vehicles -- ones that can burn gasoline or an alternative. It was at a time when methanol, usually made from natural gas, was the trendy alternative.
Sharp told Automotive News, "We were trying to take care of the vehicle end of a difficult chicken-and-egg problem."
Sharp, who represented an Indiana district from 1975 to 1995, last year became president of a nonprofit group called Resources for the Future. It does not take positions on specific policy proposals but does analyze options.
Sharp said a good case probably can be made for government subsidies for an emerging technology, such as making ethanol from plant waste.
But sustained high subsidies for corn ethanol, merely to provide an alternative to some of the nation's gasoline consumption, "probably does not make economic sense," he said.
A divided industry
Some people in the automobile industry also are skeptical.
At recent technology briefings for reporters, Toyota executives questioned the economics of E85 and wondered aloud whether the United States wants to be devoting more than 20 percent of its corn crop in 2012 to meet the ethanol production goal.
But the automaker -- which has placed its chief petroleum-saving bet on hybrid vehicles and not alternative fuels -- acknowledges that many forces are working in E85's favor. They include the support of national-security hawks, unrest in petroleum-producing countries, the vulnerability of oil production infrastructure exposed by last year's hurricanes and Brazil's success converting to ethanol.
And, of course, $3-a-gallon gasoline.
Dennis Minano, who was GM's vice president for environment and energy when the company's enthusiasm for ethanol took root, cited experience with all-electric vehicles as a reason for E85.
"You've got to have a portfolio. We learned you could not bet on one technology," he told Automotive News.
Sue Cischke, Ford's vice president of environmental and safety engineering, said that for years her company downplayed the ethanol capability of its vehicles because consumers didn't understand what "flexible fuel" meant.
Now they do, and so the company is able to tout vehicles that can use either E85 or gasoline, she says.
Nevertheless, ethanol's winning streak could be in jeopardy.
Sen. John McCain of Arizona, a likely contender for the Republican nomination for president, has said this about ethanol:
"Ethanol is a product that would not exist if Congress didn't create an artificial market for it. No one would be willing to buy it. Yet, thanks to agricultural subsidies and ethanol producer subsidies, it is now very big business (enriching) primarily one big corporation, ADM. (But) ethanol does nothing to reduce fuel consumption, nothing to increase our energy independence, nothing to improve air quality."
You may e-mail Harry Stoffer at [email protected]