Fuel fracas

An US Environment Protection Agency decision has added fuel to the fire in the row between the American oil industry and ethanol producers

Published: Wednesday 31 August 1994

-- THE conflict between the US oil industry, which manufactures methanol, and the ethanol producers lobby, has acquired the overtones of a guerrilla war. Charges are flying thick and fast. A recent advertisement in the Washington Post proclaimed: "One ounce of methanol will make you permanently blind." Using ethanol -- an alcohol made from maize -- might encourage pump attendants to separate the spirit and sell it to thirsty motorists, oil industry propagandists retort.

The tension between the 2 sides has been palpable ever since the US Environmental Protection Agency (EPA) gave a mandate in favour of ethanol in its cleaner-burning petrol programme. On June 30, the EPA announced that the country's 9 smoggiest cities must clean up their act by ensuring that 30 per cent of the additives in gasoline come from a renewable source. As ethanol is the only product that can meet this requirement, the decision came as a big bonanza for corngrowers and the ethanol industry.

The demand for corn in the cities covered by the cleaner fuel programme is expected to escalate and many other areas could jump on to the clean-up bandwagon. Robert Hauser, a professor at the University of Illinois, foresees a 12-15 per cent rise in corn prices. Employment opportunities too could perk up in the ethanol industry. In Illinois alone, the increased demand for ethanol is expected to create 3,200 additional jobs.

The aggrieved US oil industry is unlikely to take the EPA verdict in favour of ethanol lying down. The American Petroleum Institute, which represents the interests of the industry and packs considerable punch with its annual budget of $80 million and a well-oiled public relations machinery, has already threatened to challenge the decision on legal grounds.

The irony is that neither ethanol nor methanol has a proven record of substantially-reducing smog levels and thus the public is unlikely to benefit. In the long run, say us-media reports, corn producers and the ethanol industry may be the only real beneficiaries and that too for time-worn, vote-gathering reasons.

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