Tuesday, December 07, 2010

Ethanol on the Run

"Finally, a left-right coalition is emerging to end ethanol subsidies", so writes the WSJ Editorial Board on 12/6. 17 Senators signed a letter calling ethanol "fiscally indefensible" and "environmentally unwise". Most of us have known this for years (I have a quarter inch folder on the pros and cons; if you are a corn farmer, you are pro) yet the Obama administration is attempting to raise the percentage of ethanol mixed in gasoline from the current 10% to 15%. The WSJ Editors quote the senators, "Historically our government has helped a product to compete in one of three ways; subsidize it, protect it from competition, or require its use. We understand that ethanol may be the only product receiving all three forms of support from the U.S. government at this time."

Since ethanol supporters always point out the subsidies received by big oil, you might want to read "Facts About Subsidies for Oil", also on the editorial page of today's WSJ. It takes 4 gallons of water to produce a gallon of ethanol but Cornell ecology professor David Pimentel says when you count all the water including growing the corn, trucking the ethanol, (most people don't know that corn ethanol must be transported by truck as it won't flow through pioes like oil) etc., a staggering 1700gallons of water are actually needed to produce one gallon of the $.51 a gallon tax subsidized ethanol.

Alan Guebert, a reputable columnist wrote in the JS on 11/14/06, "Revealing truths about the ethanol 'solution'", that Purdue University calculated that if oil was a $70 a barrel and corn $3.15 a bushel puts a sweet $1.40 a bushel of pure profit into the pockets of the ethanol blenders. On November 28, 2006, Guebert wrote "Ethanol's hopes rest on unanswered questions" and an ethanol over-production bust is on the horizon."

That horizon arrived and many farmers, and other speculators, went bust.

But not because of efforts by farmer backed Aaron Schock who worked to win support for his 15%, eventually 20% blended ethanol compulsory legislation (JS 1/08) eventually passes. Chuck Grassley from Iowa is desperate to keep the $.54 gallon U.S. tariff on sugar-based ethanol from Brazil causing the rest of us to pay more when we fill up our tanks with corn ethanol-blended gasoline.

Jim McConoughey, although he faired poorly in his run against Schock, got it right when he supported efforts for more research for alternate energy but would not support the ethanol mandated subsidies forever.

Did I ever tell you that politics is almost all about special interests and it's a dirty game? No wonder so few people even register to vote or even then cast a ballot in any election.

As for all farm belt politicians up for re-election year after year, they have to count the votes from the corn farmers, almost all who vote in elections. Every stance they take has to be weighed by how the voters will react.

I did not vote to get re-elected. I researched and voted for what I considered in the best interest of my community. Special interest groups did not offer to help fund my elections nor did I ask them for money.

Claims that increased use of corn for fuel increases food prices, that fertilizer runoff has created a dead zone in the Gulf of Mexico are true but those who get paid these hefty subsidies are not about to agree.

1 comment:

Anonymous said...

You got it EXACTLY right. Keep it up!