EPA Decision a Boon for Mechanics and Lawyers

On Wednesday, the U.S. Environmental Protection Agency announced that it will allow an increase from 10 percent to 15 percent in the amount of ethanol blend in gasoline. The catch: The 15 percent blend is only for light passenger vehicles manufactured in 2007 or later. This is certainly good news for mechanics, who can expect more engine repair work when confused motorists inadvertently pump E15 fuel into older cars that are not designed to handle fuel with this much ethanol. Ethanol is more corrosive than gasoline, and a higher blend of the corn-derived fuel is likely to damage older engines. It is unclear that even motorists with newer vehicles will want to use E15, since it would void their warranties unless their vehicle is E85 capable. One can only imagine how many lawsuits will be filed by angry drivers.

It is obvious that the EPA's latest ruling on ethanol is designed to help meet a federal mandate in the 2007 Energy Independence and Security Act. The mandate calls for an increase in the use of renewable transportation fuel to 36 billion gallons by 2022. Corn-based ethanol is expected to supply most of the increase.

The good news is that the EPA did not require the instillation of E15 pumps, and it is doubtful that many gas stations will jump at the chance to install expensive new equipment that can  be used only by a small percentage of motorists. Customer confusion and exposure to lawsuits makes adding E15 pumps a risky decision at best for the small businesses that operate many of the nation's service stations.

Government attempts to direct energy markets by mandates, regulations and subsidies almost always end badly. Yesterday's E15 decision by the EPA is just one more example.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.