Business Ethics Fortnight "More Fun than Decent People Think Should Be Legal"

Valparaiso University

Team Members: Tamara Carnahan, Benjamin Hampton, Jon Hallemeier, Erin Maloney

Advisor: Sandra Visser

Topic/Audience: Fuel Advisory Commission for Tomorrow

Executive Summary

The Indy Racing League recently announced its partnership with the ethanol industry as well as plans to phase in the use of 100% fuel-grade ethanol for all cars in its IndyCar racing circuit by 2007. The announcement emphasized the corn-based fuel’s unique, environmentally friendly qualities and pointed to ethanol as the only viable, commercial-scale, transportation fuel alternative to gasoline currently in the marketplace. The IRL’s change to ethanol comes at a time when alternative fuels are receiving significant attention from scientists, politicians, and consumers nationwide. By partnering with the Ethanol Industry, the IRL hoped not only to “improve racing’s environmental footprint,” but also to “showcase a great American fuel source” and to maintain its reputation as an industry leader in technological innovation and leadership.

Almost immediately following the announcement of the partnership, environmental advocacy groups criticized the IRL for its decision and challenged many of the environmental claims made by the IRL in its press release. These challenges prompted the IRL to reconsider both its decision to switch to ethanol and its partnership with the ethanol industry. The Fuel Advisory Commission for Tomorrow was called in to assist in these deliberations. While the Commission concluded that ethanol is an acceptable stop-gap substitute for methanol and that the IRL’s current partnership provides valuable short-term benefits, the Commission also concluded that the current venture with the ethanol industry poses a significant long-term risk. The Commission recommends that the IRL scale back its current partnership with the ethanol industry so that it might retain the flexibility and independence necessary to preserve its reputation as an industry leader in technological innovation and leadership, especially in the area of renewable fuels.