[defenderSD]

But you also have to count the energy required to distribute the ethanol in trucks to blending plants, because ethanol can't be blended in at big refineries. That's a significant amount of energy and other transportation expenses.

This ethanol mandate is economically stupid because it greatly increasese the cost of gasoline with virtually no benefit to our nation in energy independence. The right way to become more energy independent is to produce more oil and gasoline domestically and develop more fuel-efficient engines and lighter vehicles. The main result of this ethanol mandate is to boost the profits of agri-business at the expense of the American consumer. This is another stupid, costly idea forced on the American people by a corrupt US congress.

[Mr. Lucky]

The argument that ethanol can't be transported in pipelines is a canard. The diffused nature of the production and blending of ethanol doesn't lend itself to pipeline transportation in any event. Pipelines are efficient in the transportation of large volumes of a single fluid commodity from a limited number of origins to a limited number of destinations. That's a great system for imported oil, but not for domestically produced alcohol (which is largely transported by rail tank car).

In the present market, the price of ethanol has nothing to do with its cost of production. Ethanol's price moves in sympathy with the cost of gasoline and then is bumped up by the federal (and any local) tax incentives. (The wholesale price of ethanol exceeds the retail price because the blender receives a tax credit against the fuel tax on gasoline). The production of fuel ethanol is hugely profitable right now, which drives the expansion we're now seeing, which, in turn, will eventually cause its price to moderate.

The subsidies on both ethanol and gasoline only serve to distort the market and are lousy ideas.