The green energy movement -- the effort to switch from fossil fuels to cleaner, renewable energy sources such as solar and wind power, but also biofuels such as ethanol -- is driven by good intentions ... mostly. But it is also riddled with unintended, even ridiculous, consequences that often outweigh the good the movement hopes to achieve.
Here's why:
Declining Gas Tax Revenue: People who buy hybrids and electric cars reasonably expect to buy less gasoline, but that creates a problem for the states: lower gas-tax revenues.
According to a recent story in Automotive News, "State and local gas-tax revenue has declined every year since 2004, falling 7 percent to $37.9 billion in 2010, according to inflation-adjusted data from the Institute on Taxation and Economic Policy, a Washington-based nonpartisan research group." And gas-tax revenue provides about 40 percent of the revenue for highway construction and repair.
Of course, green cars still use the roads and highways, so Washington state responded by imposing a $100 annual fee on electric cars and Virginia approved a $64 fee on hybrids and electrics, according to Automotive News. Other states are considering similar options.
Thus, those taking responsible steps to reduce their carbon footprint may simultaneously be increasing their "tax footprint."
The No-Choice Penalty: Last year the Environmental Protection Agency (EPA) slapped U.S. refineries with an $8 million fine for defying federal law by not blending 8.65 million gallons of cellulosic biofuel-fuel made from grasses, wood chips and agricultural wastes-with gasoline.
There is, however, one teensy-weensy problem with the federal biofuels mandate: The product doesn't exist commercially.
Congress passed the Renewable Fuel Standard in 2005 (and expanded in 2007), based in part on wishful promises from green energy promoters that millions of gallons of cellulosic biofuels would be available. Well, promoters got their federal and state subsidies but never produced the cellulosic biofuels.
However, the EPA did not see the lack of a product as a reason for not using it and so kept the fine. The refineries took the issue to court and won last January-at least for now. It's a novel standard: Just because a company can't do something doesn't mean it shouldn't.
The Green Military: In an effort to demonstrate its environmental bona fides, last summer the U.S. Navy bought 450,000 million gallons of ethanol, at $26 a gallon, to use in summer naval maneuvers.
But spending seven times the cost of traditional fuel in tight budget times is only part of the story: The Pentagon wants to build three biofuel refineries to make its own ethanol.
The government has committed $210 million-$170 million from the Navy and $40 million from the Department of Energy-and hopes to persuade private sector companies to match it. But given the Navy has zero experience as an entrepreneur or a refinery, it may bring a whole new meaning to the term "sinking ship."
Pumping Up Prices with Ethanol: Federal legislation that passed prior to the Great Recession requires refineries to mix 13.8 billion gallons of ethanol with gasoline this year.
However, the slow economy, increased fuel efficiency, and the growth in hybrid and electric cars mean that Americans are using less gasoline than predicted.
Normally we would be thankful for that reduced consumption, but it's also causing problems.
Refiners currently limit their gasoline mix to 10 percent ethanol, known as the "blend wall," because a richer blend could harm many automotive and other engines.
If refiners mix the federally mandated amount of ethanol with less gasoline, they could exceed their 10 percent safe target. But if they don't, they must buy renewable energy credits-in essence, a tax. That tax could add about 10 cents to a gallon of gasoline. Thus consumers will pay more for gasoline, not because it's scarce, but because of federal regulations.
Meanwhile, about 40 percent of the U.S. corn crop is converted into ethanol, which reduces the supply available for food and drives up the price. Since corn is a staple for many countries, especially south of the U.S. border, higher prices make food unaffordable for the poor, which has led to riots in Mexico.
The federal government's determined effort to cut back on the use of fossil fuels is having an enormous impact, but not in the way it was supposed to. Rising fuel costs, increased taxes and government spending, and growing food shortages are a high price to pay for a mostly unsuccessful environmental dream.