Ethanol and Inherent Contempt

While cigars may no longer be passed around, there’s smoke leaking from back rooms of the Whitehouse, an arrogance we haven’t seen such the 1800s that’s hustling red state votes from the farm belt and oil patch to grow and refine corn but providing little strategic policy to help America succeed.

From an editorial at the NYTimes: “The United States should let sound science and sound economics rather than politics drive its energy consumption and policy.” [firewall sub] [emphasis added]

Cash CornThe editorial goes on to say that the economics of corn ethanol have never made much sense.

Rather than importing cheap Brazilian ethanol made from sugar cane, the United States slaps a tariff of 54 cents a gallon on ethanol from Brazil. Then the government provides a tax break of 51 cents a gallon to American ethanol producers — on top of the generous subsidies that corn growers already receive under the farm program.

Corn-based ethanol also requires a lot of land. An O.E.C.D. report two years ago suggested that replacing 10 percent of America’s motor fuel with biofuels would require about a third of the total cropland devoted to cereals, oilseeds and sugar crops.

Meanwhile, the environmental benefits are modest.

Doug Powell in the thick of the agri-belt at Kansas State’s International Food Safety Network, points out that our food prices are skyrocketing under this President’s crop policy.

There is nothing wrong with developing alternative fuels, and there is high hope among environmentalists and even venture capitalists that more advanced biofuels — like cellulosic ethanol — can eventually play a constructive role in reducing oil dependency and greenhouse gases.

What’s wrong is letting politics — the kind that leads to unnecessary subsidies, the invasion of natural landscapes best left alone and soaring food prices that hurt the poor — rather than sound science and sound economics drive America’s energy policy.

A new report from one of the most trusted consultants to the U.S. poultry industry which competes for corn supplies for use as feed, makes it clear that the so-called free-market policies of the Republicans are an unnecessary sham.

“Ethanol is one of the most profitable enterprises in the United States today, but unfortunately a high percentage of those current profits come not from the marketplace, but from the federal treasury.”

“Federal supports are severely distorting crop prices while adding little, if anything, to the stated goals of the renewable energy program.

“The ethanol program is also increasing the federal outlays and has very little impact on U.S. dependence on foreign oil,

“On a net energy basis, ethanol will not make a significant contribution to overall U.S. energy production. Instead, the ethanol boom will have a huge impact on the worldwide supply of corn and other grains.

“The ethanol boom is driving up the cost of food production, and could eventually cost a family of four about $460 a year in higher food costs.”