The Washington swamp is filled with ethanol

December marks the tenth anniversary of the passage of the Energy Independence and Security Act (EISA), and its wildly expansive Renewable Fuel Standard (RFS), better known as the ethanol mandate.

President Trump recently paid homage to the RFS, as all feel they must do to play politics in Iowa. Too bad. Trump, who claims he wants to “drain the swamp,” will never manage it, if he fails to see that the swamp is full of ethanol.

People forget how we wound up with an ethanol mandate worth over $20 billion per year (and that doesn’t include various subsidies). EISA was passed because Americans besieged members of Congress, demanding a solution to soaring gasoline prices. Congress didn’t have one, but needed to “do something.” The something they settled on was ethanol.

There are, actually, two stages of the RFS. The first began in 2005 when, amid rising gasoline prices, Congress passed the Energy Policy Act (EPAct). That bill gave out subsidies for all sorts of energy development, but its main claim to fame was the RFS. Refiners would be required to blend up to 7.5 billion gallons of biofuels, in practice mainly corn-derived ethanol, into gasoline. The Wall Street Journal termed this “a gigantic transfer of wealth.”

But clearly it wasn’t gigantic enough. Gasoline prices continued to increase, and even President George W. Bush decided that the 2005 bill, which he’d touted, was inadequate for an America “addicted to oil.”