Growth Energy is at odds with a research paper released by Iowa State University's Bruce Babcock. The paper suggests that allowing the ethanol tax credit and the tariff to lapse wouldn't have much of an impact on the U.S. ethanol industry. According to Growth Energy, Babcock's paper assumes that the Environmental Protection Agency approves E15 and it results in the use of a lot more ethanol, as much as 15 billion gallons.
Growth Energy has repeatedly pointed out that these government supports are important because ethanol only has access to a small portion of the transportation fuel market. However, with more market access, the government supports become less important. Growth Energy's Fueling Freedom Plan would bust the market open and force all fuels to compete for the consumer's dollar.
Growth Energy believes Babcock has muddied the waters of understanding by writing about E15 this way: most gas sold in the United States contains 10% ethanol, a limit the Environmental Protection Agency may increase to 15% this fall. Growth Energy says the words "may increase the blend" is dramatically different than his study which assumed not only the existence of E15, but also that the introduction of E15 "substantially increases U.S. ethanol demand."