Saturday, December 16, 2006

The Ethanol Scam

Can we grow our way out of an energy crisis by using ethanol?

Not likely, according to Cornell University professor David Pimental who said in a
recent article: "It is absolute stupidity, and it is a major scam."

Why would business leaders, state and U.S. lawmakers perpetuate a "major scam" on the public?

"Big money and politics" Pimentel said. "Those two words tell it all. Ethanol has 45 times the subsidies that gasoline has. Our government is spending $6 billion annually on subsidies for ethanol."

And the government has, since 1978, subsidized the ethanol industry, according to the non-partisan budget watchdog, Taxpayers for Common Sense. Tax exemptions that total more than $11 billion with a production mandate through 2012 plant dollar signs in the eyes of investors, even if the dynamics of corn-produced biofuel present economic and environmental challenges.

2 Comments:

At 12/16/2006 6:46 PM, Anonymous Anonymous said...

This argument conveniently ignores a obscenely major expenditure that is an effective oil-industry subsidy -> military spending in the Middle East. We spend nearly half of our entire $448 billion defense budget protecting and ensuring the free flow of the 853 million barrels of oil that we get every year from the Persian Gulf. This equates to an gasoline/oil subsidy of $225 billion per year. This means that the US government spends about $265 per barrel of Persian Gulf oil so the oil companies can buy it on the open market for $60 per barrel.

Makes the $6 billion subsidy on ethanol seem like a rounding error, doesn't it?

Add to this the additional $200 billion we actually spend buying oil from all OPEC nations, and you quickly realize that we are spending nearly $500 billion per year obtaining energy from foreign sources. (An aside: 8 of the 11 OPEC nations openly either hate America or harbor terrorists who want to kill us.)

The debate we should be having in America isn't whether ethanol is the answer, because this takes our "eye" off the real ball. We should be relentlessly pursuing all alternative energy sources that could meaningfully contribute to our country's becoming energy-self-sufficient

Imagine what America could accomplish if we spent a fraction of the $225 billion on initiatives that foster energy-independence (hybrid, ethanol, wind, solar, nuclear, etc) instead of on military activities.

Bear in mind, if we were energy-independent, we wouldn't care what happened in the Middle East. If you doubt this, ask yourself why we aren't in Darfur? The answer: no oil deposits therefore not our problem.

I would love if people reallocated their "hate ethanol" energy into raising awareness for energy independence!

 
At 12/16/2006 11:59 PM, Anonymous Gary Dikkers said...

Mark Perry asked, "Can we grow our way out of an energy crisis by using ethanol?"

Not likely Mark, and the reason is that ethanol -- particularly corn ethanol -- is not actually a renewable fuel.

Modern industrial corn farms can only grow corn in the quantities they do because of natural gas and petroleum.

They must have synthetic nitrogen fertilizers made from natural gas, and pesticides, herbicides, and fungicides made from petroleum to produce the yields they do. That is especially true now that more and more farmers are deciding not to rotate crops, and instead go to corn after corn that effectively mines the soil, depleting it of its natural nutrients.

(There are sustainable corn farms such as those of the Amish that rely on crop rotation and fertilizers from animal waste, but their yields are far below the industrial operations.)

Unfortunately, agribusiness and the ethanol industry remain silent and in a state of denial about how dependent their corn production is on natural gas.

Over 90% of the nitrogen fertilizer they use is synthesized from natural gas. Even worse, over 60% of that nitrogen is made overseas (from foreign natural gas) and imported into the U.S.

It is a joke and scam to call corn ethanol "renewable." A fuel such as corn ethanol whose production is utterly dependent on natural gas and petroleum can in no way be considered "renewable."

The hard truth is the corn ethanol business is all about politics and agribusiness and not about energy security. Modern corn ethanol is only possible because of an underpinning of mandates, subsidies, tax credits, and protective tariffs all made possible by Corn Belt politics, lobbyists, and the ethanol cartel.

 

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