Kansas newspapers calls for end to ethanol subsidy
It's no secret that ethanol is a controversial fuel. There are numerous arguments against the use of corn-derived alcohol as a fuel, both economic and environmental. The federal and some state governments have been subsidizing corn ethanol production for many years, but the 2007 energy bill mandated a huge increase in production of both corn and cellulosic ethanol.
The subsidies were intended to be a carrot to stimulate production, but with production now mandated, the subsidies now seem redundant, at least according to the editorial board of the Kansas City Star. The paper is calling for the repeal of the corn ethanol subsidies which seem to do little more than line the pockets of big corn producers and processors. Eliminating the 45 cent per gallon credit would also pave the way for cheaper sugar can ethanol to come in from Brazil. There should also be more rigorous study of the effects of corn ethanol production including water and land use.
[Source: Kansas City Star]
Reader Comments (Page 1 of 1)
jim 8:31AM (10/19/2009)
Won't happen, this is the land of subsidy addiction, corporate welfare style. Once in place a subsidy becomes an entitlement and a battalion of lobbyists are deployed to keep the tap open. After all it conform to the American motto: The Best Government that You Can Buy.
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paulwesterberg 10:39AM (10/19/2009)
I thought the motto is:
The best government money can buy.
drewfuss 8:51AM (10/19/2009)
"Kansas Newspapers"???
Ummm... the Kansas City Star is in Kansas City, Missouri, not Kansas.
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Kumar 9:06AM (10/19/2009)
Won't happen just because of the power and funding behind the ethanol lobby.
The only thing on most lawmakers' minds is 'how much more ethanol can we mandate to be in a gallon of gasoline?'
One more reason to go diesel...
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Carney 11:11AM (10/19/2009)
Diesel is a petroleum based fuel, just like gasoline, only much dirtier. More acid rain causing sulfur, more smog-producing smoke, soot, and particulate matter. Even if it has filters and whatnot, where does the money go?
At least corn farmers and agribusiness refrain from funding and propagating terrorism. The same can't be said for OPEC.
Joeviocoe 11:27AM (10/19/2009)
Diesel is not a good comparison for Ethanol but biodiesel is a good comparison to E85. Biodiesel is made with 15-20% methanol but is much cleaner than gasoline or diesel. Sure NOx is still present not due to the fuel but the higher compression of the diesel engine.
Can't make ethanol in your garage but biodiesel can. Also, it can be made from a higher variety of products from animal fat, vegetable oils, or soy. Cellulose based ethanol is just starting but looks promising.
Tim 9:46AM (10/19/2009)
It's just too easy to spend other people's money and the power is so seductive that Congressional Crony Corporatists just can't resist.
If we only had true Free Market Capitalism instead of the Corporate Cronyism (Corporatism) we’ve been stuck with since the Fed was created.
Throw the bums OUT, audit and then End the Fed!
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PabloKoh 1:17PM (10/19/2009)
and term limits for every office! Citizen legislators not career politicians!
thirty7 10:27AM (10/19/2009)
FANTASTIC - End the subsidies - I cringe every time I remember a news interview with an Iowan corn farmer saying, "we want to be come the Kuwait of America." Scary thought. Here's hoping for leadership and someone to stand up and say the ethononal subsidies were a mistake and all subsidies of corn have actually lead to a proliferation of high frutose corn syrup and ultimately a lack in real sugar. The end result is a heavier America. I'll stop there.
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Aaron 10:55AM (10/19/2009)
Not "sugar can ethanol", but "sugar cane ethanol"...
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Carney 11:06AM (10/19/2009)
The ethanol subsidy is no doubt a distortion of the free market by government. It is right to be cautious and hesitant about entering into such policies, and an overall attitude of healthy skepticism and searching inquiry is a good general rule to have for them.
But almost nobody supports total free reign in all circumstances. For instance, during World War 2 the government ordered carmakers to simply stop making all passenger cars for private purchase - our full industrial capacity was needed for the war effort. All trade and commerce with the enemy was also banned. Yes, that was government power interfering with voluntary transactions and distorting the economy - too bad.
Today, petroleum profits are the primary source of funds for those who are making war on us. Even domestic petroleum, or petroleum from totally unobjectionable / friendly nations such as Canada or Norway, STILL enriches our enemies, because oil is fungible and removing any available oil from the world market by buying it makes the oil offered by our foes that much more scarce and valuable, enabling them to charge more for it. Thus, ANY purchase of oil from ANYONE ANYWHERE at ANYTIME funds our enemies. Oil is enemy fuel.
With that unalterable reality in place, it not only makes sense for us to support and explore alternatives, such a policy is strategically and morally (if not legally) mandatory.
Also, it is important for those who only care about dollars and cents to remember that OPEC's unfixable grip on the world oil market has cost the US hundreds of billions extra per year. Compared to that, the tiny impact of the ethanol subsidy ($10 billion at most, when also adding in tax and other regulatory breaks) is pathetically small. Most of those in oil cartel funded think tanks thundering against the ethanol subsidy seem strangely indifferent to the far more devastating impact on our prosperity from the foreign-imposed OPEC tax. Of especial concern is OPEC nations' sovereign wealth funds buying increasingly large chunks of US media firms. They are systematically subverting our education, media, and government institutions.
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Doug 3:42PM (10/19/2009)
Get the subsidy right: The 45 cent/gal blender's credit goes to blenders of ethanol which are the oil companies and independent blenders - not ethanol producers. The oil companies tend to pass that on to their retailers (note Valero's lack of refining margins in spite of this tasty subsidy). Corn growers receive no new subsidies for ethanol - in fact, we were paying them *not* to grow corn, remember. So where's this 'huge' subsidy in the energy bill? There wasn't one - we actually reduced the blender's credit from over 50cents/gal. Where's the fire?
As for Brazilian ethanol, we already import 5-7% of Brazil's annual production (according to the RFA: ethanolrfa.org). The U.S. produces nearly 2X the ethanol that Brazil does. Why do we think it's going to have such a huge impact by being able to import it, even at incrementally lower prices? Even with the tariff, it's cheaper than U.S. ethanol in coastal regions. You just can't get your hands on that much of it.
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Thunderbuck 7:12PM (10/19/2009)
Brazil might not be that big a supplier, but the Caribbean could provide considerable amounts of ethanol.
UnnamedMan 10:45PM (10/19/2009)
Actually, they should repeal the progressive sugar import tax. We could then import our sugar from South America (cheaper), stop turning corn into High Fructose Corn Syrup (which is bad for us) and make ethanol instead (corn producers still have a market). This might also help with the weight problem we have in this country.... I think it is wins all around.
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