By the time America’s second energy crisis in five years hit in 1979, ethanol had returned to the headlines.
In that year, an Office of Alcohol Fuels was set up in the Department of Energy by President Jimmy Carter, where it bunked uncomfortably with the pro-oil and pro-nuclear forces who also called the DOE home. But the reappearance of a wrenching gas shortage and lines at the pump, plus the legislative might of the farm lobby and its grateful servants in Congress, saw its status grow with the passage of the Energy Security Act of 1980, mandating that within 10 years, 10 percent of all fuel would be alcohol distilled from crops.
(Separate yet related, the National Academy of Sciences was releasing its most damning report yet on the subject of lead gasoline, “Lead in the Human Environment,” which identified the world’s dominant fuel additive as the world’s greatest source of atmospheric lead pollution.)
With ethanol, President Carter tried to give America medicine it didn’t want to take, which was arguably not ethanol per se but any discussion of curbing consumption and the population’s need to wean itself off fossil fuels. The oil industry had its own reasons to hate ethanol, which were entirely economic (though they’d claim otherwise), citing problems like phase separation, even though engineers had licked that issue some 50 years earlier. The war against farm alcohol that had begun in the 19th century and intensified with the rise of automobility erupted once again, despite the fact that ethanol was experiencing pockets of success around the world and that its backers were pushing it as a wholesome, 100-octane gasoline additive, not as a replacement for oil.
Having already passed tax incentives, Congress in 1980 passed the Gasohol Competition Act, which was meant to assure ethanol the level playing field it had never enjoyed. In an accompanying congressional report, researchers reviewed refiners’ history with ethanol: “It appears that in the past, several major oil companies … refused to permit their franchisees to utilize company pumps and tanks for the sale of gasohol. The companies refused to allow use of their credit system for gasohol sales. Moreover, some companies threatened to terminate a franchisee’s contract if the franchisee even offered to sell gasohol.”
Law or no, the oil companies’ antipathy towards ethanol continued to burn brightly. A 1988 suit brought by the state of Illinois in conjunction with local ethanol producers and refiners alleged more than 10,000 examples of wrongdoing, among them:
• Gulf Oil and Amoco refused to allow their credit cards to be used for the purchase of gasohol, in spite of the federal mandate.
• Shell imposed an added 3.5 percent surcharge on gasohol.
• Ethanol was disparaged by stations adorned with signs reading “contains no alcohol, ethanol, or methanol,” implying that such gasoline additives make for inferior fuel. There was also widespread advertising critical of alcohol or boasting that a company’s fuel contained no ethanol.
• Some oil companies prohibited ethanol storage at their depots.
• All the major oil companies, save Texaco, required de-branding of gas pumps containing ethanol, again implying an inferior product.
The suit was dismissed on procedural grounds, but by that time the oil industry had long since found itself a powerful ally in the White House. In 1981 President Reagan made killing the ethanol mandate one of the first items on his presidential to-do list, canceling more than $1 billion in grants, loans, and loan guarantees — despite supporting the use of grain alcohol in gas during his campaign.
Ethanol use declined in the years ahead, only to jump back into the mix when MTBE crashed to its deserved death in the 1990s. The industry had lobbied vigorously for permission to use this one-time refinery waste product as an emissions-reducing gas oxygenate in favor of ethanol. Congress agreed, thereby consigning countless supplies of drinking water to be polluted with a foul-tasting carcinogen.
Today, there are more than 17 million flex-fuel cars on American roads capable of running on E85, a mix of 15 percent petroleum product and 85 percent ethanol. Because there are few places to find E85, the credits these vehicles bestow on their makers, which limit their liability for fines under CAFE regulations for their otherwise too-thirsty fleets, are undeserved. Nonetheless, if carmakers know that amount of ethanol can work, why is it that the oil industry is still busy today insisting that fuels with only 15 percent ethanol — certified, incidentally, by the EPA for use in all cars built after 2001 — is a disaster for car owners? Why? History tells us why.