Friday, January 25, 2008

 

Scam of the Day

The Energy Policy Act of 2005 requires that 7.5 billion gallons of renewable biofuel be blended into petrol by 2012. To make that happen, the federal government has been subsidising refiners of E85 with tax credits to the tune of 51 cents a gallon. Meanwhile, to keep the corn-growers well fed, the government has been levying a tariff of 54 cents a gallon on imported ethanol.

But, wait, that’s not all. Car companies in America get a fuel-economy credit for every flex-fuel vehicle they sell. The government rates the fuel economy of flex-fuel vehicles at about 165% the miles per gallon (mpg) they would get on straight petrol. In reality, vehicles running on E85 get 25-30% fewer mpg than their petrol equivalents.

As it costs only $200 to turn a conventional car or light truck into a flex-fuel vehicle, the industry can save itself billions in potential fines that would otherwise accrue for failing to meet the government’s CAFE (corporate average fuel economy) requirements.

—Tech.view column in The Economist, "Bumpy ride for biofuels"

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