A Deserving Victim Of The Crash

Higher food prices, fuel prices, and taxes. Hooray for ethanol!

Looks like oil speculators and subprime bond sellers aren’t the only villains taking a bath during these tough times. Another victim that richly deserves its recent misfortune is the ethanol industry. An AP article out yesterday says that many ethanol plants, which have popped up like warts in the last few years, are being shuttered. Good riddance.

Ethanol made from corn and soybeans - the stuff these plants consumed - was always a huge boondoggle. Big agribusiness loves it because they’ve convinced their flunkies in government to subsidize it at ridiculous rates. But the amount of energy consumed to create ethanol practically cancels out the energy it provides. And as more and more farmers started selling their crops for fuel, food prices went crazy. So you can thank ethanol for that sticker shock you get every time you go to the grocery store now.

But you’re not just paying for the ethanol sham at the checkout counter. By the time you get there, you’ve already paid for it with your taxes, thanks to the billions in subsidies Washington hands out. And you’re paying for it with higher gas prices as well. Washington has mandated that fuel sellers must use quotas of ethanol, which forces up the cost of refining and transporting their product. Not to mention, ethanol corrodes pipelines so it has to be trucked all over the country, which burns even more fuel and raises prices even more.

All these costs for a bogus compound that doesn’t significantly reduce our carbon emissions or our dependence on foreign oil. Sounds like a perfect Washington solution to me!

There is a better biofuel: so-called cellulosic ethanol, gas made primarily from non-food sources like grasses. They already make gobs of it in Brazil and its practically solved their energy problems. But congressmen from corn-growing states have blocked attempts to import this cleaner, greener, cheaper alternative by putting enormous tariffs on it. Happily, another AP article out this week offers some reason for optimism. Looks like the government is investing in cellulosic plants here in the U.S. Let’s hope it happens. We could use some good news in this country for a change.