Yesterday’s edition of the Internet news juggernaut, The Huffington Post, ran an ethanol love song written by Bob Dinneen, who is identified in his HuffPo biography as “the ethanol industry’s lead lobbyist before the Congress and Administration.”
Given that Mr. Dinneen is a professional shill, there’s no need to repeat his self-serving argument. Whatever is his case for ethanol, the bottom line is his bottom line. But it is worth saying a few things about the reality of ethanol.
Ethanol is touted as a solution to America’s dependence on foreign oil. It is true that ethanol—an alcohol distilled from corn—can be used to run cars. “Can,” however, does not mean “should.” Indeed, ethanol is a bad idea both economically and environmentally.
For starters, ethanol is twice as expensive as gasoline, so filling your car with ethanol raises your fuel bill. Also, by turning corn, which is usually used food, into fuel, demand for food increases. So, increased ethanol use raises your food bill too. Finally, ethanol is awful for the environment—it results in increased corn cultivation, which leads to greater nitrogen runoff, which causes massive, oxygen-depleted “dead zones” in our streams, lakes, rivers and oceans.
Yet Americans are forced to buy ethanol thanks to laws written by the ultra-powerful corn and agribusiness lobbies. Ethanol makes corn growers and ethanol producers rich, so they have spent millions lobbying legislators to pass (1) generous taxpayer subsidies for ethanol production, and (2) a Soviet-style production quota that forces Americans to use a certain percentage of ethanol in the nation’s fuel supply (last year, Americans were forced to buy 9 billion gallons of corn fuel).
So why is the Huffington Post pimping the ethanol boondoggle when so many others have stopped supporting these corrupt programs?
King corn and its agribusiness allies could never convince Americans to buy ethanol; instead, they convinced Congress to force ethanol on consumers. The industry’s existence is a powerful testament to lobbyists’ ability to rig the rules of the game to enrich their clients at the expense of everyday Americans—a tacit endorsement from the Huffington Post can only help the ethanol lobby continue to do so.
Huff Po is generally a well-done publication, so why run a pitch by a guy who is trying to get rich by screwing the consumer? Since when are greedy lobbyists palatable to the left?
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{ 11 comments }
Every form of enterprise is not bad just because some people do it wrong, you know. There is a group which has been instructing people how to make ethanol in a completely different manner for 30 years.
Its president is David Blume.
Its website is http://www.alcoholcanbeagas.com.
Its book is "Alcohol Can Be A Gas!"
Everything you've learned about ethanol fuel has been wrong. Ethanol fuel actually could save the whole dying world, and our dying country with it.
A final note: The H. Post isn't "pimping" anything. Pimps get paid, and are considered to be ever-so-slightly selfish. The H. Post ran a story on ethanol because it's important, whatever your opinion might be, not for the money.
To the best of my limited knowledge in todays world or at anytime for that matter, I believe that the Huffington Post has a left leaning agenda and therefore would tend to believe that ethanol is a positive energy source for the transportation in this country.
Every form of enterprise is not bad just because some people do it wrong, you know. There is a group which has been instructing people how to make ethanol in a completely different manner for 30 years.
Its president is David Blume.
Its website is http://www.alcoholcanbeagas.com.
Its book is "Alcohol Can Be A Gas!"
Everything you've learned about ethanol fuel has been wrong. Ethanol fuel actually could save the whole dying world, and our dying country with it.
A FINAL NOTE: The H. Post isn't "pimping" anything. Pimps get paid. Then,they give five million dollars to the outfit that signs this guy's paychecks. Yep. Take a look: "William Yeatman is an energy policy analyst on the energy and global warming team at the Competitive Enterprise Institute…CEI has grown into a $5,000,000 institution with a team of over 30…"
Ray: You really think that ethanol is child of the left? It is certainly a child of a welfare case: Archer Daniels Midland and the corn lobby. But the list of its right-leaning supporters — notably, all the Republican (and most of the Democrat) Senators and Governors from the Midwest states — is at least as long as that of its left-leaning supporters. In addition, the Republican Bush Administration was a strong advocate of ethanol, as are many national-security hawks, for whom energy independence is the holy grail. Ethanol is backed by the populist, corporate-welfare wings of the two parties, and by groups beholden to the farm lobby.
Fortunately, there are ethanol critics and cynics on both sides of the political spectrum: true (rather than "Washington consensus") environmentalists, and fiscal conservatives. But they — we — face an uphill battle.
Hey, guys, check out these numbers from Jeff Broin
The tax credit for blending ethanol cost the U.S. Treasury about 3
billion dollars last year. At the same time the higher price of
agricultural commodiities decreased the direct support to farmers by
approximately $8 billion. And according to Iowa State Univesity, it
has kept down the cost of gasoline in the country by 29 to 40 cents
per gallon, saving consumers about $40 to $60 billion. I think you
call that a great return on investment.
Dear Mike in Brooklyn,
Well, I guess you would call that a good investment if you believed the numbers. I don't.
First of all, the federal volumetric ethanol excise tax credit (VEETC) in 2008 cost the U.S. Treasury $4.9 billion dollars (on 9.6 billion gallons consumed), not $3 billion. Second, the VEETC is only one of many federal and state subsidies benefiting the ethanol industry. Altogether, these other subsidies bring the total level of support to around $1 per litre, or $1.50 per gallon of gasoline equivalent.
http://www.globalsubsidies.org/en/research/biofuel-subsi...
Second, it is interesting that you cite the rising price of agricultural commodities attributable to the demand for corn for ethanol production as reducing the direct support to farmers by approximately $8 billion a year. For one, having first made that argument, when prices of food staples around the world started to climb the ethanol industry started backtracking and claiming that those rises had nothing to do with ethanol, blaming them instead on the rising demand for grains in China and India. Which is it, Mike? Does ethanol raise grain prices or not? You can't have it both ways.
In any case, the $8 billion/year "savings" is obtainable only if one compares payments in 2007 and 2008 with those in 2005 — an aberrant year. Compared with payments in 2002, 2003 or 2004, the reduction in farm payments was less than $8 billion. And, personally, I find it hard to consider the reduction of another unmerited subsidy as a "savings".
The Iowa State University conclusions (if you are interpreting them correctly: please provide a link) do not explain why, while ethanol production was rising in 2007, so was the price of oil. In fact, as we have seen lately, the wholesale price of ethanol is above that of gasoline. So how are consumers saving money now? (And, by the way, have you also factored in increase in national expenditure thanks to higher grain prices?)
The ethanol lobby has shown that it is willing to twist the numbers in any way it sees fit in order to defend its subsidies. We all understand that: it's called rent seeking.
Correction: "Altogether, these other subsidies bring the total level of support to around $1 per GALLON, or $1.50 per gallon of gasoline equivalent."
What correction are you making, Ronald S?
BTW, have you looked at the subsidies to the oil industry, including troops and tanker protection in the Middle East? Have you looked at the breaks built into the tax system? I think people oversimplify when they bash ethanol and are too eager to welcome oil company views on this, especially when these views have dominated discussion for 100 years. I would take their propaganda with a grain of salt.
Or maybe the Competitive Enterprise Institute can't because it is funded by????
Dear Mike in Brooklyn,
I think what happened was that the moderator cleared my third comment, but has not yet cleared the second (the original). On my screen it still says "Your comment is awaiting moderation". At the risk of repeating myself, here it is, with the correction incorporated:
"Well, I guess you would call that a good investment if you believed the numbers. I don't.
"First of all, the federal volumetric ethanol excise tax credit (VEETC) in 2008 cost the U.S. Treasury $4.9 billion dollars (on 9.6 billion gallons consumed), not $3 billion. Second, the VEETC is only one of many federal and state subsidies benefiting the ethanol industry. Altogether, these other subsidies bring the total level of support to around $1 per gallon, or $1.50 per gallon of gasoline equivalent.
http://www.globalsubsidies.org/en/research/biofuel-subsi...
"Second, it is interesting that you cite the rising price of agricultural commodities attributable to the demand for corn for ethanol production as reducing the direct support to farmers by approximately $8 billion a year. For one, having first made that argument, when prices of food staples around the world started to climb the ethanol industry started backtracking and claiming that those rises had nothing to do with ethanol, blaming them instead on the rising demand for grains in China and India. Which is it, Mike? Does ethanol raise grain prices or not? You can't have it both ways.
"In any case, the $8 billion/year "savings" is obtainable only if one compares payments in 2007 and 2008 with those in 2005 — an aberrant year. Compared with payments in 2002, 2003 or 2004, the reduction in farm payments was less than $8 billion. And, personally, I find it hard to consider the reduction of another unmerited subsidy as a "savings".
"The Iowa State University conclusions (if you are interpreting them correctly: please provide a link) do not explain why, while ethanol production was rising in 2007, so was the price of oil. In fact, as we have seen lately, the wholesale price of ethanol is above that of gasoline. So how are consumers saving money now? (And, by the way, have you also factored in increase in national expenditure thanks to higher grain prices?)
"The ethanol lobby has shown that it is willing to twist the numbers in any way it sees fit in order to defend its subsidies. We all understand that: it's called rent seeking."
You ask, have I looked at the subsidies to the oil industry? Yes I have, or at least the estimates that others have come up with. The breaks built into the tax system for oil are on the order of those provided to ethanol now, but of course spread over many more gallons (77 billion gallons vs. less than 10 billion gallons in the case of ethanol)? If one includes that part of the cost of providing protection of supply lines in the Middle East that can truly be attributed to that function (as opposed to repairing the damage in Iraq, protecting Israel, rattling sabres at Iran — from which the United States buys no oil — and chasing down the Taliban in Afghanistan) most estimates place the total subsidies to oil AND natural gas at around $40 billion per year.
I am not suggesting petroleum should be subsidized. But if one divides that $40 billion over total U.S. consumption of petroleum products (317 billion gallons per year), that works out to around 13 cents per gallon — less than 1/10th the $1.50 per gallon of gasoline equivalent benefiting ethanol.
The point is, it is folly to think that the United States can wean itself off of oil through subsidies. Much better would be to internalize the externalities in a carbon tax. At a reference value of $50 per metric ton of CO2-equivalent, that works out to slightly more than $0.50 per gallon of gasoline. For biofuels that are truly low-carbon fuels, that would be an incentive worth about the same as the current VEETC.
You do your arguments no credit, Mike, by trying to paint all critics of current ethanol policy as stooges of the oil companies. I guess that you haven't noticed that many of the critics are environmentalists, fiscal conservatives, or anti corporate-welfare campaigners?
Personally, I have no connection with the oil industry nor with the CEI. Any possibility, by chance, that you have a connection to the biofuels industry?
This is frustrating. I have tried to post two additional, substantive comments, and they are still "awaiting moderation".
Iowa State
http://www.card.iastate.edu/publications/DBS/PDFF…
Subsidies to oil
http://www.energyandcapital.com/articles/oil-gas-… http://www.icta.org/doc/Real%20Price%20of%20Gasol…
Subsidies for ethanol exist to level the playing field. The oil industry has slanted the field in its favor for 100 years, including Rockefeller's move funding Prohibition to end alcohol fuel production.
Money invested in ethanol stays at home, doesn't go overseas. Your numbers favor an industry unreasonably, methinks but I can't persuade you otherwise and it's not worth it on the web so I won't.
Even environmentalists can be conned by big oil.
Time to move on to different sources re corn. Plenty out there. The environmentalists are right, time to dump monoculture and corporate agriculture.
alcoholcanbeagas.com
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