Forcing refiners to harm consumers

In Atlas Shrugged, Ayn Rand said that to force a man “to act against his own judgment, is like forcing him to act against his own sight.” This often happens with government regulations, especially when they force businessmen to take actions that are obviously destructive to their business and harmful to their customers.

The Renewable Fuel Standard mandate is a prime example of such a regulation. This mandate requires that an increasing amount of ethanol be blended into gasoline as part of the government’s broader campaign against fossil fuel usage.

Ethanol is corrosive, and so high concentrations of ethanol are bad for engines. Rich Herder — a shop owner who annually repairs thousands of lawnmowers, chain saws, and other machines — estimates that 75 percent of the damage he sees results from the use of ethanol. “It’s the biggest disaster to hit gasoline in my lifetime,” says Herder.

Gasoline today typically contains up to 10 percent ethanol. But, to continue to comply with the mandate’s increasing requirements, refiners must likely start blending a lot more E15 — gasoline with 10 to 15 percent ethanol.

EPA stickers insist it is safe to use E15 in vehicles that were produced after 2001, but many automobile and oil industry representatives disagree. Chrysler, Toyota, General Motors and other automakers have written to Congress warning that E15 may damage fuel systems on newer vehicles. Urging the immediate suspension of selling E15, the American Automobile Association (AAA) has issued a similar warning. Urging the immediate repeal of the RFS mandate, the American Fuel and Petrochemical Manufacturers have also warned against forcing more ethanol into gasoline.

The danger of corrosion from ethanol is so acute that the EPA itself prohibits using E15 in the hundreds of millions of other products that need gasoline, such as lawnmowers, boats, motorcycles, snow blowers, and other outdoor equipment. All of these products must instead be fueled by E10.

By forcing refiners to use more ethanol than they think is safe for the majority of intended uses, the government is forcing refiners to choose between creating a product that they fear will harm consumers and facing the legal consequences of not following the mandate. Paraphrasing Rand’s point, it’s as if refiners are being forced to act against their own sight.