Time to cut fed subsidy for ethanol

On the road to energy independence, we will go down some dead-end streets. When we do, we should have the good sense to turn around and go the other way.

It now seems clear that growing corn to produce ethanol makes neither business nor environmental sense, and it's time to gradually withdraw government support for this industry.

Ethanol once seemed to be a bright spot in America's energy outlook. We have an abundance of farmland and an agricultural industry second to none. We are good at growing corn, and corn can be turned into an additive for gasoline.

So, the U.S. Congress chose to build an ethanol industry by heavily subsidizing its production. Not only that, it slapped a large tariff on foreign ethanol producers to keep them from competing with our producers.

Now, 10 years later, scientists and environmentalists agree that it takes as much or more energy to produce a gallon of ethanol as you get from burning it, and that the environmental damage may be greater than burning plain old gasoline.

What's more, many complain ethanol reduces horsepower, gums up small carburetors and eats through flexible hosing found on boats and other small motors.

Yet, government handouts have a mysterious way of living on even after the original purpose for them has disappeared.

Despite terrifying federal deficits and a newly energized Congress dedicated to cost-cutting, the ethanol subsidy is poised for renewal.

Legislation moving through Congress to renew the Bush-era tax cuts includes  the 45-cent-per-gallon subsidy on ethanol as well as the 54-cent tariff on imported ethanol.

This will do three things: Cost taxpayers about $5 billion per year for the subsidies, cost them more for gasoline at the pump and raise prices for a host of food products.

And, of course, it will show that horse-trading, log-rolling and lobbying — in other words, business as usual — are still the way policy is made

Large investments were made with government encouragement in ethanol plants and equipment, so the subsidy cannot be cut suddenly or completely.

It can and should, however, be phased out over a period of years.

With agricultural prices high in Midwestern farm states, this would be the best time to start.

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Displaying comments, from newest to oldest

kailee123's picture

ethanol....

I think we should get rid of ethanol. I had to replace the rubber diaphrams in my lawn mower this year. My car even saw a loss in mpg so it's costing me more to drive. Just doesn't make sense to subsidize something that uses more energy than it produces. Is this really green?

JLaBonte's picture

It is amazing that the

It is amazing that the Editorial Board comments broadly about ethanol as if it can only be derived from corn. With a little research, they could have assessed the research being completed at UMaine to extract hemi-cellulose and create ethanol, or other bio-based fuels during the pulp making process. If this can be done without affecting pulp yield, it could create significant opportunities for industry in Maine, create an alternative product/revenue stream for these facilities, and be an alternative fuel that does not affect food prices.

skippy's picture
verified

Do not knock ethanol so

Do not knock ethanol so quickly. It may not be as efficient as gasoline, but it can power our cars and can make us less dependent on foreign oil. Ethanol is not the culprit here, the culprits are the government officials who dictate ethanol to be made from corn. We grow a lot of sugar cane in this ocuntry and that could be used more efficiently to make ethanol. I believe sugar beets are also a better source of material to make ethanol. We should let the market dictate what source we need to make ethanol. Also, we have to remind ourselves that we have just discovered a very large source of oil in the U.S. in North Dakota, South Dakota and Montana. Now if the environmentalists are not allowed to strangle us some more, we can build refineries to refine this oil and maybe the ethanol question will be moot.

Pirate's picture
verified

Cut out the subsidies, which

Cut out the subsidies, which will cause shortages, which will cause the price of ethanol to go up, which will make it unprofitable to continue putting it in gasoline, which will cause our engines to give us back the 4 mpg we lost when they started putting that crap in the gasoline in the first place. It's about time someone addresses this before they jack the ethanol content in our gas up to 15%, which will REALLY cause massive problems to gas engines.
Ethanol has been proven to be a hoax; it's now time to end it.

gary52's picture

I am in total agreement with

I am in total agreement with this editorial. Ethanol is a big mistake, just like on shore wind power, but in both cases, government subsidies and fast track permitting are all about power plays, and have nothing to do with economic feasibility or the common good.

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