On Friday, July 23, the Chicago Tribune published an editorial titled “Enough Ethanol” and on Saturday, July 24, The Washington Post editorial said, “It’s time to end the excessive subsidies for corn ethanol.” On Monday, July 26, The Wall Street Journal joined the chorus.
“The best refutation of the theory of the survival of the fittest is probably the corn ethanol lobby, whose annual $6 billion in federal subsidies have managed to outlive both its record of failure and all evidence and argument,” said The Wall Street Journal.
The ethanol subsidy is on the front burner for Congress because it is due to expire and Sen. Jeff Bingaman (D-NM), Chairman of the powerful Senate Energy and Natural Resources Committee, has expressed support for cuts to the tax credit program. A twenty percent cut (nine cents per gallon) is being debated in the House Ways and Means Committee.
Jimmy Carter’s belief that ethanol could replace or reduce dependence on foreign oil imports and reduce greenhouse gas emissions was totally bogus. Nothing about converting corn to fuel makes any sense at all. In July 2007, I laid out the facts, quoting E. Ralph Hostetter, the publisher of American Farm Publications.
“Today, 60 percent of the American corn crop is fed to U.S. livestock,” noted Hostetter. “Therefore, as the price of corn is forced up by the demands of ethanol production and many natural causes such as weather, so is the price of meat, poultry, eggs, milk and more than 3,500 products American use every day.”
I noted that, “Among the products affected by the rise in the cost of corn are cake mixes, pizza, beer, whisky, candies, cookies, corn flakes, cosmetics, instant coffee, carbonated beverages, fertilizers, vitamins, tires, toothpaste, paper products, pharmaceuticals such as aspirin and more than 85 different types of antibiotics. And that’s just a short list.”
The Washington Post looked at the cost to the consumer in the form of “decades of subsidies the government has showered on the corn ethanol industry.” It suggested that “The debate should be about why corn ethanol deserves any federal protection at all.”
Little known or understood is the fact that the federal government gives “companies that combine corn ethanol with gasoline a 45-cent tax subsidy for every gallon of corn ethanol added to gasoline.” The result is that the cost of replacing a gallon of gasoline with one of corn ethanol is $1.78. “The tax incentives alone cost the Treasury $6 billion in 2009.”
What does the consumer get? For every gallon of a gasoline-ethanol mix, the price includes less mileage. Ethanol is a poor source of power. FlexFuel vehicles run on E85 or 85% ethanol and, according to the Department of Energy, they get about 25% less mileage than a car fueled by undiluted gasoline.
For those still worried about greenhouse gas emissions, ethanol emits carbon dioxide and, since natural gas or coal is used to produce ethanol, it ends up putting more CO2 into the atmosphere than the production and use of gasoline.