"Policymakers and legislators often fail to consider the law of unintended consequences. The latest example is their attempt to reduce the United States' dependence on imported oil by shifting a big share of the nation's largest crop – corn – to the production of ethanol for fueling automobiles.
Good goal, bad policy. In fact, ethanol will do little to reduce the large percentage of our fuel that is imported (more than 60 percent), and the ethanol policy will have ripple effects on other markets. Corn farmers and ethanol refiners are ecstatic about the ethanol boom and are enjoying the windfall of artificially enhanced demand. But it will be an expensive and dangerous experiment for the rest of us.
President Bush has set a target of replacing 15 percent of domestic gasoline use with biofuels (ethanol and biodiesel) during the next 10 years, which would require almost a fivefold increase in mandatory biofuel use, to about 35 billion gallons. With current technology, almost all of this biofuel would have to come from corn because there is no feasible alternative.
American legislators and policymakers seem oblivious to the scientific and economic realities of ethanol production. Brazil and other major sugar cane-producing nations enjoy significant advantages over the US in producing ethanol, including ample agricultural land, warm climates amenable to vast plantations, and on-site distilleries that can process cane immediately after harvest.
Thus, in the absence of cost-effective, domestically available sources for producing ethanol, rather than using corn, it would make far more sense to import ethanol from Brazil and other countries that can produce it efficiently."
Lets see, we'll double the cost of food so we can produce fuel that is more expensive per mile than the oil we have sitting in the ground? Sounds like government planning to me.
OpinionJournal - Potomac Watch:
"It's taken politicians a while to catch on to these anti-ethanol vibes, but they've now got the picture. At an agriculture conference in Indianapolis last fall, Indiana Gov. Mitch Daniels, Agriculture Secretary Mike Johanns and EPA Administrator Stephen Johnson spoke, delivering their usual fare about how ethanol was the greatest thing since sliced corn bread. They expected warm applause; in the past the entire ag community united around helping their brother corn farmers make a buck. But now that ethanol is literally taking food from their beasts' mouths, much of that community has grown less friendly. According to one attendee, Messrs. Daniels, Johanns and Johnson were later slammed with snippy ethanol questions from angry livestock owners, much to their dazed surprise. Word is that even the presidential candidates--who usually can say no wrong about ethanol while touring the Midwest--are having to be more selective about where they make their remarks.
Things are even hotter in Washington, where lobbying groups are firming up their positions against corn ethanol. The hugely influential National Cattlemen's Beef Association has gone so far as to outline a series of public demands, including an end to any government tax credits (subsidies) for ethanol and an axe to the import tariff on foreign ethanol. Put another way, the cattlemen are so angry that they are demanding free markets and free trade--a first. Maybe ethanol really is a miracle fuel. In any event, expect the ethanol call to get harder for Plains state senators such as Max Baucus, Ben Nelson and Byron Dorgan."
Note: 60% of corn production has been used to feed animals in the US - those costs have doubled also...
1 comment:
There are considerable disadvantages to using corn to make ethanol. Firstly, the process is not very efficient, secondly, by taking corn out of the food chain, you make it attractive to grow other crops too. This increases the amount of land under cultivation that means that farmers will be looking at drier, less vialble land and will have to take water out of underground aquifers. Who has the first rights to that water, farmers or people living nearby who need it to drink? Thirdly, the price of food will rise. There's much more about this on the Big Biofuels Blog. check it out.
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