4/15/2008
From Frank Lasee: Corn is King (and taxpayers aren't...)
A recent Time Magazine article on the ethanol boondoggle is worth reading. Now, after years of the media selling us that ethanol would be good for the environment, and end our dependence on foreign oil, it turns out the unintended consequences are that the “green” fuel may be worse for us than drilling for oil.
I have opposed ethanol mandates and subsidies, all along for a variety of reasons. Mandates are poor public policy because in the long run, market forces are better at meeting our energy needs, at the best cost, than political preferential treatment and subsidies.
It should have been obvious. Turning a food source into an energy source and burning it in our cars would ultimately affect the cost of food. (Just because we don’t teach the law of supply and demand, it does not mean it goes away.) More people are beginning to starve around the world. As corn is diverted to fuel, the number of starving people will double over the next 20 years. A United Nations (U.N.) food expert recently called agrofuels a “crime against humanity.” (I call it a crime against our wallets, as well as, a crime against the hungry.) President Bush, just yesterday, pledged $200 million to the U. N. to feed the world’s hungry—our tax dollars at work.
If you have been to a grocery store recently, you will have noticed that all of our staples, eggs, milk, cheese, bread and meat have gone up in price. (Yet, our Democratic Congress is considering even more subsidies to keep more farmland out of production— more of our tax dollars at work.) Food cost inflation is causing more politicians to want to give more dollars to food stamps—more of our tax dollars at work.
With these wrong-headed policies, you can count on food prices going up even more.
Last month, the Department of Energy announced $385 million in ethanol production grants in addition to the tax dollars already supporting ethanol. So we can feel good about ourselves, again.
Contrast this with the fact that there are more untapped oil reserves in North America - billions and billions of barrels. The U.S. Minerals Management Service (a branch of the Interior Department) estimates 102 billion barrels of oil and 635 trillion cubic feet of gas beneath federal lands and coastal waters (that does not include oil under private lands). Also, there are oil reserves under the Federal and state laws prohibit drilling under the Great Lakes, even though directional drilling makes it possible without platforms on the lake. Imagine the boon to Wisconsin's economy if the Great Lakes oil were drilled and refined here. Think of the on-going jobs and the lower price of gasoline.
Back to ethanol—ethanol gets about 30% less mileage to the gallon than petroleum products. Ethanol produces carbon emissions like gas. The environmentalists told us that the emission would be better because they come from natural products, not petroleum, but carbon is carbon. The emissions are just as bad, if not worse because it take more fuel to get the same distance. The unintended worldwide loss of forest to cropland reduces the ecosystem’s ability to absorb the emissions.
And, most obvious to us, and startling to the environmentalists, is that crops grow on land. Worldwide the rate of deforestation accelerates as the value of corn increases. The energy cost of turning crops into fuel has been debated since 1972. By the time the planting, tilling, fertilizing, and transporting have been taken into account, more fuel may have been expended than can be converted into energy for our cars. It takes 500 pounds of corn to produce ½ tank of gas for an SUV - think about that for a moment.
Whenever politicians (and that is bi-partisan) get involved, the well-connected and wealthy benefit through tax subsidies from our money, it screws up the market place. That costs everyone.
Why aren’t we building more oil refineries in our country?
Because of politics.
Why aren’t we drilling for oil in the United States?
Because of politics.
Why aren’t we building more nuclear plants, a source of relatively clean energy?
Because of politics.
The environmentalists are schizophrenic—opposed to clean nuclear power. They ignore the fact that nuclear fuel can be recycled and turned into energy, too.
It was a good thing that further ethanol mandates were not considered this session. There are many representatives of farming districts that still want the mandates. More money to be made with your tax dollar with favorable regulations for corn growers.
We must be very careful when we mandate seemingly good ideas that make us feel good. Turning food into fuel is a bad idea.
Frank Lasee is a Republican and represents the 2nd Assembly District.
COMMENTS
Jo,
Bravo to someone from Wisconsin who opposes ethanol by seeing it for the sham that it is currently. Note also the $.50/gallon Federal subsidy plus state subsidy. Not only do we screw up the market for food but we pay for it out of our taxes (or borrow it). I must note however that the recent $300mm grant for ethanol research is dedicated mostly for cellulosic ethanol, something that does have promise to use waste cellulose or non intensive farming instead of corn. Brazil for example is quite energy independent because it uses sugar cane waste for ethanol production. Only we in the USA waste our resources on corn ethanol to pander to the mega agribusinesses and (yes) the local corn farmer.
dave allen (Tue Apr 15 21:54:48 2008)
I'm 100% with you on ethanol Dave. Most specifically, on the positive - celluosic ethanol. And yes, let the markets work, for crying out loud. Geeesh.
Perhaps this is something you can agree with Senator McCain on. Here's a paragraph from an interview last night with Lawrence Kudlow:
McCAIN: No. I would—no. But I’ll tell you what, I would eliminate ethanol subsidies. I would eliminate the tariff on imported ethanol. I think our market is being very badly distorted as far as food prices are concerned. I know you know food prices skyrocketed 17 percent in a very short period of time. That’s because we’re distorting the market. I’m for biofuels, I’m for all that stuff, but let’s let the market play. Let’s not subsidize ethanol or any other alternate form of energy. Let’s go ahead and take away the imports. Let’s eliminate sugar protection. My God, it’s amazing, still, the power of some of the sections of agriculture in America. And let’s eliminate loopholes that are specially targeted, rifle-shotted to specific industries and—both agriculture and business, and let’s let them all compete.
Jo E. (Wed Apr 16 03:11:08)
I agree w/ McCain 100% on that. I didn't ck the link though. There are lots of McCain policies I agree with. I could have voted for him in 2000 had he been the candidate.
dave allen (Wed Apr 16 06:41:46 2008)
Ethanol subsidies are the devil's own brainchild. It will mean ever higher food prices, and further demise of small farms. The last time we sold animals at the auction barn, 100 calves were shot; nobody would buy them at any price, as "they cost too much to feed."
emily matthews (Sat Apr 19 13:54:15 2008)
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