Big Corn And Ethanol Hoax

Remember the Energy Act of 2005? Remember how ethanol was to be our savior from high gas prices and was supposed to help us get off of our dependence on foreign oil? Well, those promises were as empty as the space that fills the light-years between solar systems.

As you have probably noticed, gas prices have gone up and you’ve probably also noticed that we are still just as dependent, if not moreso, on foreign oil as we were before. You’ve probably also noticed the unintended side-effect of higher food prices for us consumers to pay.

Anyone schooled in basic economics would have seen this coming. Further, anyone schooled in basic economics can see where it is going and more importantly, why.

Dr. Walter Williams notes the following in his latest column:

Ethanol contains water that distillation cannot remove. As such, it can cause major damage to automobile engines not specifically designed to burn ethanol. The water content of ethanol also risks pipeline corrosion and thus must be shipped by truck, rail car or barge. These shipping methods are far more expensive than pipelines.

Ethanol is 20 to 30 percent less efficient than gasoline, making it more expensive per highway mile. It takes 450 pounds of corn to produce the ethanol to fill one SUV tank. That’s enough corn to feed one person for a year. Plus, it takes more than one gallon of fossil fuel — oil and natural gas — to produce one gallon of ethanol. After all, corn must be grown, fertilized, harvested and trucked to ethanol producers — all of which are fuel-using activities. And, it takes 1,700 gallons of water to produce one gallon of ethanol. On top of all this, if our total annual corn output were put to ethanol production, it would reduce gasoline consumption by 10 or 12 percent.

Ethanol is so costly that it wouldn’t make it in a free market. That’s why Congress has enacted major ethanol subsidies, about $1.05 to $1.38 a gallon, which is no less than a tax on consumers. In fact, there’s a double tax — one in the form of ethanol subsidies and another in the form of handouts to corn farmers to the tune of $9.5 billion in 2005 alone.

There’s something else wrong with this picture. If Congress and President Bush say we need less reliance on oil and greater use of renewable fuels, then why would Congress impose a stiff tariff, 54 cents a gallon, on ethanol from Brazil? Brazilian ethanol, by the way, is produced from sugar cane and is far more energy efficient, cleaner and cheaper to produce.

Because this whole thing has been a sham and a hoax. The only results are that we have less efficient fuels, higher prices for food, use of even more oil to produce the ethanol and only the big corn and ethanol companies and interests are showing any profit from it.

Dr. Williams goes on:

But politicians, corn farmers and ethanol producers know they are running a cruel hoax on the American consumer. They are in it for the money. The top leader in the ethanol hoax is Archer Daniels Midland (ADM), the country’s largest producer of ethanol. Ethanol producers and the farm lobby have pressured farm state congressmen into believing that it would be political suicide if they didn’t support subsidized ethanol production. That’s the stick. Campaign contributions play the role of the carrot.

The ethanol hoax is a good example of a problem economists refer to as narrow, well-defined benefits versus widely dispersed costs. It pays the ethanol lobby to organize and collect money to grease the palms of politicians willing to do their bidding because there’s a large benefit for them — higher wages and profits.

So, when are the socialist Dems going to investigate “Big Corn” for price gouging?

Congress needs to end this madness now, before it costs us so much that we won’t be able to afford any new research into truly viable alternative energy.

You can access the complete article on-line here:

Big Corn And Ethanol Hoax
Dr. Walter Williams
March 12, 2008


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