Saturday, January 27, 2007

Big Corn: Ethanol Has Many Consequences

1. From today's WSJ, an editorial about "Big Corn":

"Ethanol gets a 51-cent a gallon domestic subsidy, and there's another 54-cent a gallon tariff applied at the border against imported ethanol. Without those subsidies, hardly anyone would make the stuff, much less buy it -- despite recent high oil prices.

So here comes Big Corn. Make that Very, Very Big Corn. Sooner or later, our experience with this huge public gamble may make us yearn for the efficiency, capacity, lower cost and -- yes -- superior environmental record of Big Oil."

2. From today's
Washington Post:

"Mexico is in the grip of the worst tortilla crisis in its modern history. Dramatically rising international corn prices, spurred by demand for the grain-based fuel ethanol, have led to expensive tortillas."


At 1/27/2007 9:38 PM, Blogger John Booke said...

Professor Perry it would be wonderful if you could post a chart comparing subsidies and tax breaks for "Big Corn" and "Big Oil."

At 1/28/2007 2:21 AM, Blogger Mark J. Perry said...

Petroleum subsidies are less than $1 billion a year -- six to eight times less than ethanol subsidies -- and work out to about 0.3 cents per gallon.

At 1/28/2007 10:00 AM, Blogger Unknown said...

Mark, please add the tax advantages for big oil as well as all US military support big oil gets. Please remember all wars are always about MONEY. In the middle east money means oil. How much are we spending to protect our supply of oil for the oil companies? I think we are up over a billion. Please tell the whole story Mark.


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