NY Times Editorial on The High Costs of Ethanol
According to the NY Times, these are the Top 5 Reasons ethanol imposes high costs on the economy:
1. Rising Food Costs and Social Unrest: "The distortions (of ethanol) in agricultural production are startling. Corn prices are up about 50 percent from last year, while soybean prices are projected to rise up to 30 percent in the coming year, as farmers have replaced soy with corn in their fields. The increasing cost of animal feed is raising the prices of dairy and poultry products.
Ethanol production in the United States and other countries, combined with bad weather and rising demand for animal feed in China, has helped push global grain prices to their highest levels in at least a decade. Earlier this year, rising prices of corn imports from the United States triggered mass protests in Mexico. The chief of the United Nations Food and Agriculture Organization has warned that rising food prices around the world have threatened social unrest in developing countries."
2. Damage to the Environment: Ethanol threatens natural habitats and imposes other environmental costs. “The overall environmental impacts of ethanol and biodiesel can very easily exceed those of petrol and mineral diesel,” an OECD report said.
3. Ethanol Requires a Lot of Land: "Replacing 10% of America’s motor fuel with biofuels would require about a third of the total cropland devoted to cereals, oilseeds and sugar crops."
4. Corn Ethanol Requires Political Protectionism: "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."
5. Ethanol is All About Politics, NOT Economics or Science: "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."
WOW! The NY Times nailed it.