Tag: ethanol

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Accountability folly free trade & free markets moral hazard porkbarrel politics too much government

Crony Corn

pig, port, corn, ethanol, subsidies, gas, fuel, Common Sense, Paul Jacob

The presidential campaign officially begins in Iowa. The Hawkeye State is also the nation’s corn-​growing champion. Each year, Iowans sell 47 percent of that crop to produce ethanol, which accounts for a not-​insignificant 8 percent of the state’s gross product.

Ethanol has friends in Washington, too. Congressional wizards have mandated that the gasoline pumped into cars throughout the land be diluted with ethanol — talk about a market guarantee!

At National Review, Jeremy Carl explains that “energy-​policy experts of all political stripes can agree … mandates and subsidies to promote the use of corn ethanol (a policy first implemented by Jimmy Carter) are wasteful boondoggles that harm our environment and food supply while imposing billions of dollars of hidden costs on consumers. However, most energy-​policy experts are not running for president in the Iowa caucuses.”

In 2008, both Sen. Hillary Clinton and Sen. John McCain flip-​flopped to support the ethanol subsidies they had previously opposed.

But, this year, Sen. Ted Cruz and Sen. Rand Paul haven’t pandered along.

When Cruz rose to first place in the polls, Gov. Terry Branstad attacked, arguing, “It would be a big mistake for Iowa to support [Cruz]” because “his anti-​renewable fuel stand … will cost us jobs, and will further reduce farm income …”

Yesterday, Fox News Sunday host Chris Wallace asked Cruz, “Why should [Iowa] voters side with you over the six-​term governor of this state?”

“I think there should be no mandates and no subsidies whatsoever,” Cruz replied.

In today’s Iowa caucus, can Cruz overcome the forces of crony corn?

This is Common Sense. I’m Paul Jacob.

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pig, port, corn, ethanol, subsidies, gas, fuel, Common Sense, Paul Jacob

 

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free trade & free markets national politics & policies too much government

Corn Subsidies Fail Big

America has a problem: obstinate politicians, the Obstinacy in Chief, especially.

Almost any policy high-​lighted at some point in the last few years could serve as an illustration of this point, but let’s choose the once-​popular “green” pro-​ethanol policies.

George W. Bush pushed ethanol, and Barack Obama doubled-​down on the subsidy, making it a centerpiece for his low carbon-​footprint notion.

It has not worked.

What it has done is create what environmentalists are now calling “an ecological disaster.”

How?

It created a land rush that swallowed vast tracts of land sporting alternate uses, including millions of acres of conservation land, including wetlands. And the huge amounts of insecticide and fertilizer used in the effort have poisoned wells and water supplies as well as rivers and the Gulf of Mexico.

All to plant more corn than the market demands.

But is it doing what the government wants, and Obama demanded — the whole reason for this goofy program after all?

“The government’s predictions of the benefits have proven so inaccurate,” write Dina Cappiello and Matt Apuzzo for the Associated Press, “that independent scientists question whether it will ever achieve its central environmental goal: reducing greenhouse gases. That makes the hidden costs even more significant.”

Over-​production, higher costs, externalized burdens — typical for a government subsidy. But what can we do about it?

In early 19th century Britain, Richard Cobden and John Bright started the Anti-​Corn Law League, which successfully opposed the biggest protectionist program of the age. We could use another such vital force, this time to oppose the idiotic subsidies that raise food prices internationally as well as wreak havoc on land in the Mid-West.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies too much government

Gore’s Gas-​Based Admission

Al Gore gives the impression of someone never willing to acknowledge error if said error happens to be self-serving.

This impression is wrong. 

If I have ever suggested that Gore never admits self-​serving mistakes, I hereby rescind and repudiate that suggestion. He appears more than willing to retire a dishonest assertion … so long as he has another dishonest assertion to replace it with.

Ed Morrissey tells the tale at Hot Air, opining that Al Gore’s revised opinion about the virtue of government subsidies for corn-​based ethanol seems just a little too convenient.

Gore now acknowledges that the energy-​conversion ratios of first-​generation ethanol “are at best very small,” and that corn subsidies probably bid up food prices. He even admits that he pushed for the funding to help farmers in states like Tennessee and Iowa. So it came to pass that taxpayers paid billions, in part to help Gore run for president.

Wait, there’s more. 

Having recanted his support for “first-​generation” ethanol, Gore now wants to use wood and grass to make ethanol. A new and better way, n’est-ce pas? No. There’s this small detail: Grass etc.-based ethanol is even more inefficient than corn-​based ethanol.

Why top a bad blunder at taxpayer expense with an even worse blunder at taxpayer expense? Could this have anything to do with Al Gore’s investment in Abengoa Bioenergy, a firm begging for government subsidies for second-​generation ethanol?

This is Common Sense. I’m Paul Jacob.

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Common Sense

Starve the Poor, Feed a Senator

Subsidies for ethanol are the biggest reason why food prices are rising faster than gas prices. This is leading to a worldwide humanitarian crisis, with the poor being hit hardest. Think of that when you next pump your ethanol.

And the main reason to favor ethanol over gasoline — to reduce carbon emissions so to help keep our planet cool — proves worse than empty. What’s required to grow and produce ethanol puts more carbon into the atmosphere than does producing and burning gasoline.

So why keep up the charade?

Well, ask Barack.

Senator Obama says he’s running to reduce the power of special interests. But, as the New York Times carefully parsed it, “like any other politician, he has powerful constituencies that help shape his views.” Tom Daschle, co-​chairman of Obama’s campaign, says Obama possesses “a terrific policy staff” … which seems united in advising him to push ethanol.

The fact that Obama represents a state filled with lots of people who directly benefit from pro-​ethanol subsidies may also have something to do with his enthusiastic support.

Obama has given the standard “national security” reason for the policy, too — energy independence — but I won’t repeat his arguments. They make no sense. If Americans don’t buy Arab oil, Europe, China, and India will. Big deal. Trillions will still go to some bad guys.

And, uh, billions will go to Obama’s friends.

Change? No, politics as usual.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies porkbarrel politics too much government

Nifty Doesn’t Cut It

Just because something can be done doesn’t make it economical to do. There is a big difference between physics and economics.

Take ethanol. It might seem nifty to grow the fuel for our cars and trucks like we do our food, in fields. But niftiness alone is not enough. Nifty notions, like un-nifty ones, must prove out in terms of all the costs involved.

A growing amount of research shows that ethanol doesn’t cut costs at all.

The most recent ethanol debunker I’ve come across is Robert Bryce, author of a forthcoming book with a provocative title, Gusher of Lies: The Dangerous Delusions of “Energy Independence.” Interviewed on ReasonOnline by Brian Doherty, Bryce offers some fascinating perspectives on energy economics and policies.

  • Did you know that for every gallon of ethanol, there’s at least 51 cents of subsidy?
  • Had you heard that corn-​based ethanol produces more greenhouse gases than does our use of fossil fuels?
  • Have you stopped to think about all the water that raising more corn would require, and the increasing expense of getting gargantuan more amounts to farms in the midwest?

These and other considerations lead Robert Bryce to call current ethanol policy a “scam”and “the longest running robbery of taxpayers in American history.”

Some forms of bio-​product may be more economically feasible than ethanol, like the biodiesel made from the unused parts of slaughtered animals. But we should wait to see how they cost out, too, without subsidy.

This is Common Sense. I’m Paul Jacob.