It's finally dawning on everyone -- even Congress -- that the ethanol boondoggle is wreaking havoc worldwide. It's boosting food prices, destabilizing poor nations and, ironically, harming the environment.
It's the fault of Washington politicians. The United States pays fuel companies a subsidy of 51 cents per gallon for the ethanol they put in gasoline. In 2005, Congress compelled gasoline companies to blend 7.5 billion gallons of ethanol into the nation's fuel supply. Last year, Congress boosted the blend to 15 billion gallons of corn ethanol by 2015 and 36 billion by 2022.
Have we lost our minds? Apparently so.
The ethanol industry guzzles corn so prodigiously that corn prices have tripled since the program started. With farmers dumping other crops for corn, prices of those crops have also exploded. Food prices have shot through the roof. A recent study from Purdue University puts the added U.S. food cost from the congressional ethanol mandate at $15 billion in 2007 -- about $130 per household, and that's out of date. Food prices have continued to soar since then.
Eggs are up 46 percent, milk up 26 percent. Retail prices of many food items, from cereal to sodas to salad dressing, are being pushed up by the rising prices of ingredients such as corn syrup and cornstarch.
And there's no relief in sight. This week, the government reported that April food prices jumped 0.9 percent, the biggest rise since 1990.
The impact has been felt across the planet: Global food prices have risen 83 percent in three years. The International Monetary Fund puts most of the blame on the biofuels mania, saying that taking crops out of the food supply to produce biofuel for transportation accounts for almost half of the price spike.
Just like grocery bills, the subsidies paid to farmers and fuel producers come straight out of taxpayers' pockets. So it's a double-dip: you're paying on both sides of the equation, production and consumption.
People in 40 nations are facing food shortages. Hungry people have already rioted for food in Haiti; Mexicans are protesting rising tortilla prices. Disturbances have followed in other countries, including Pakistan, which hardly needs another source of instability.
"When millions of people are going hungry, it's a crime against humanity that food should be diverted to biofuels," India's finance minister said.
America's muttonheaded biofuels policy might be forgivable if ethanol had other benefits, but in almost every way it's inferior to oil-based fuels. Ethanol provides 30 percent less energy per gallon than gasoline. Corrected for energy content, ethanol's cost is equivalent to a wholesale gasoline price of $6.67 per gallon.
Adding up all the subsidies, the rising food prices and the sheer cost of ethanol, Americans were soaked for $31 billion in 2007. And it will certainly be more this year.
Ethanol isn't even friendly to the environment. Creating one gallon of fuel requires up to 1,700 gallons of water. And it's a waste of good farm land. According to one study, fossil-fuel production is 10,000 times more efficient than biofuel, in terms of energy produced per unit of land.
In the long run, the journal Science reported, producing ethanol doubles greenhouse gases. That's largely because farmers, especially in developing nations, are cutting down forests, which consume carbon dioxide, to create farmland for corn. Compounding the problem, farmers consume oil-based fuels in growing and harvesting the corn used for ethanol. And since ethanol can't be shipped by pipeline it has to be transported to market by big trucks that belch diesel exhaust the whole way.
Even politicians are rebelling. Recently, 24 Republican senators, including John McCain, and Utah's Orrin Hatch and Bob Bennett, sent a letter to U.S. EPA Administrator Stephen Johnson, asking him to consider waiving some of the ethanol fuel requirements. That's nice, but the real answer is to repeal the subsidies and the mandates that propel this utterly irrational program.
The ethanol program has recorded a combination of ill effects rare even for government. It wastes taxpayers' money. It hurts American consumers. And it causes hunger and unrest across the globe. And it put into the marketplace an exorbitantly expensive fuel whose production results in damage to the environment.
It's time to stop this program before it can do more harm. It's time for politicians to awake from the environmentalist fantasy about the benefits of biofuels. The answers to our transportation problems will not be found there. America needs to tap its abundant oil resources in the short term -- Alaska, the Gulf of Mexico, the California coast -- and then spend the next century developing better alternatives that are friendly to the environment.
Clearly, we need to get away from oil in the long run and to break the shackles that foreign nations have clamped on America's wrists. But we need to be smart about breaking away. And ethanol just isn't smart.
Nuclear power, by contrast, could supply unlimited electricity to run vehicles without wasting productive food acres. Natural gas is another commodity that could buy time. Like oil it comes out of the ground packed with energy; a distillery is not required to light it up. (And, by the way, America's natural gas reserves are immense.) Then there are the vast oil shale and tar sands deposits in Utah and Colorado that have not yet been touched in any meaningful way.
Developing such lines makes a lot more sense that gobbling up valuable food acres for motor fuel.
Do you agree?
Posted in Editorial on Wednesday, May 14, 2008 11:00 pm
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