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Feed Me. Don’t Give Me Gas.

October 28, 2010

I go back and forth on ethanol, but mostly back. While it’s good to have options that are not fossil fuel, there still seems to be plenty of fossil fuel out there for use. Shale oil deposits have hardly been tapped, we continue to find deep-shelf reserves that we didn’t know existed. The biggest issue is environmental regulations that prevent tapping the sources, and we risk other countries figuring out how to get there first. So I usually default to the fact that ethanol is ineffecient, ruins engines over time, and raises food prices.

Here’s some new fun from Ronald Bailey at Reason Magazine on ethanol and the latest.  Go read the whole thing.

As of now, the federal government is mandating that U.S. vehicle fleet  burn 36 billion gallons of ethanol per year by 2022. Back in 2008, President Barack Obama promised to increase the ethanol mandate to 60 billion gallons by 2030. Keep in mind that the U.S. currently consumes about 140 billion gallons of gasoline per year.

The National Academy of Sciences’ policy journal, Issues in Science and Technology, has just published a remarkably disturbing commentary, “The Dismal State of Biofuels Policy,” [subscription required] about how much Americans taxpayers are likely to pay in the future for the privilege of burning food in their gas tanks.

That new 60B gallon mandate for ethanol could end up driving cumulative subsidies into the $1T range.  Hey, even by government standards, that real money.

And bioethanol subsidies even fail as a way to reduce greenhouse gas emissions cost effectively. A recent Congressional Budget Office report found that the costs to taxpayers of reducing greenhouse gas emissions through the corn ethanol tax credits comes to about $750 per metric ton of carbon dioxide. For comparison, consider that a permit to emit one ton of carbon dioxide could be had for just over $20 per ton on the European Climate Exchange.

So even if you’re going to fake environmental responsibility, you can do it better by just letting some company in Europe buy trees in Africa that don’t exist.  And as I said, all this is really doing in the near-term is pushing corn prices up.  Great for farmers (and I have several relatives that own farms that grow corn), but not necessarily good for Americans who are watching their overall food prices go up significantly as a result.

I’m all for responsible use of resources.  Somehow, raising the prices of a resource like corn in an effort to reduce the need for an already-plentiful resource like gasoline is backward to good stewardship of this earth.  So I’ll stay back on ethanol.  Let’s go drill.

One Comment leave one →
  1. October 28, 2010 8:17 pm

    Not only is ethanol bad for your engine, it also reduces your miles per gallon by about ten percent. I have documented this in my ’97 truck. When I buy non-ethanol gas, I get about 21.7 mpg in mountain driving. When I burn ethanol gas in it, I get slightly less than 20 mpg under the same driving conditions…mountain driving with my tools in the back. My truck is a ’97 S-15 GMC, 4.3L V-6 engine with 235,000+ miles on it. I can also tell the difference in the acceleration between the fuels.

    I also read on someone’s blog, a chart where it showed the rise in commodities like corn, wheat and rice as well as beef, pork and other consumable commodities. It’s somewhere in the neighborhood of 40 +/- percent rise in the last year or so. Wish I could remember where I saw it.


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