Ethanol Bailout? Time To Shuck Corn

IBD Editorials ^ | December 26, 2008

[Kaslin]

Energy Policy: The heavily subsidized ethanol industry is the latest to seek a federal bailout. If there is any industry that deserves to go bankrupt, it's this one. Time has come to stop putting food in our gas tanks.

---

The bailout-seeking domestic auto industry has been criticized as being unproductive and inefficient. It hasn't been helped by mandated fuel economy standards that have done little to reduce our dependence on foreign energy or help the environment. Now the fuel we have been mandated to put in our cars, equally unproductive and inefficient, is also seeking a bailout.

Ethanol never made much sense economically or environmentally. It never would have made it to market without congressional mandates and huge subsidies. Having the first presidential contest in the corm state of Iowa didn't hurt either. With oil prices plummeting, it is even less competitive — if it ever was.

The product has benefited from a tax credit paid to gasoline producers to blend gasoline with ethanol; a federal fuel economy standard that sets a minimum amount of ethanol to be blended; and a 54-cents-a-gallon tariff on cheaper imported ethanol made in places like Brazil. Brazilian ethanol is made from sugar, not corn. But corn is grown in Iowa, and Brazilians can't vote.

Recent legislation mandated increased ethanol use as well as a 51-cent-a-gallon tax credit and more corn subsidies. Over the last two decades the ethanol industry has been kept alive with more than $25 billion in federal handouts. Yet it still can't compete.

[webschooner]

I got some gas with some 15 or 25%, I forget which of that ethanol garbage in it by mistake a coupla years ago in the midwest when I was pulling a travel trailer. I was burning fuel so fast I could literally watch the needle fall as I drove. What a rip-off! I was really p.o’d.

[MplsSteve]

I agree with you on cellulosic ethanol.

I invested a small amount of money and bought some shares of Verenium Corp (VRNM). They’re working on making cellulosic ethanol profitable AND practical.

The wide variety of biomaterials available for cellulosic ethanol is substantially larger then corn-based ethanol.

DISCLAIMER: I do not work for Verenium nor know anyone who does.

[marsh2]

Thanks. I looked them up. Looks like Pacific Ethanol is the West Coast version. I know someone is working on the algae conversion at OIT. They sure have an unlimited supply in the Klamath lakes.

[Zack Attack]

Too big to fail?

[steelyourfaith]

~ping~

[RipSawyer]

“If it made sense, they wouldn’t have anything to do with it.”
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

That is so true about so many things these days, not just the mysterious workings of congress. At least once daily I find myself shaking my head in amazement. Not that I haven’t done plenty of stupid things myself but I don’t deliberately shoot myself in the foot and then ask someone else to push my wheelchair.

[AmericanVictory]

Obsession with ethanol, because of the lobbying strength of its proponents has interfered with the backing of actual solutions both in the marketplace and in government itself.

“Regionalizing” the ethanol boondoggle would not have made this any different.