Wednesday, September 19, 2007

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.

6 Comments:

At 9/19/2007 12:19 PM, Anonymous Anonymous said...

There are no ethanol producers in New York. So, their honesty is unimpeded.

 
At 9/19/2007 3:15 PM, Blogger Matt said...

Isn't the point of subsidies to keep farmers from going under and to stabilize prices. So if prices are going up then why aren't subsidies going down?

 
At 9/19/2007 5:32 PM, Anonymous Alex said...

Matt: the Dems are eager to make inroads in farm states and the Republicans are desperate to keep them, so naturally, they'll try to out do each other. At least thats what it seems to me.

 
At 9/20/2007 8:20 AM, Anonymous Sudha Shenoy said...

The point of subsidies is to subsidise the politically powerful & give them a guaranteed, ever-rising income out of everyone else's taxes. In return, they support the 'pollies' who do this. One hand washes the other. But the pollies are democratically-elected, thank goodness; we don't live under a _monarchy_...

 
At 9/21/2007 3:15 PM, Blogger Burl Haigwood Clean Fuels Development Coalition said...

The Times did not even come close to the truth. The real story is the “real cost of oil” and a clear understanding of why there is such a misunderstanding about ethanol. Thankfully, we are now starting to see some balanced coverage and a clear understanding about the source of mis-information ethanol myths.

 
At 9/24/2007 5:46 AM, Blogger juandos said...

Well there is this nagging thought that if Bush was against bio-fuels this New York Times nonsense would've had a somewhat different spin...

There is also this nugget from the Times of the U.K. to consider regarding bio-fuels: Rapeseed and maize biodiesels were calculated to produce up to 70 per cent and 50 per cent more greenhouse gases respectively than fossil fuels...

So one can ask, what's the point of all this unless the greening of the environment isn't really the bottom line?

 

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