The Cost Of Ethanol

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As the Obama Administration begins its push to increase the amount of ethanol required in gasoline from 10% to 15%, the Wall Street Journal on Wednesday will run an article on the actual costs of ethanol.  According to the article:

"The Congressional Budget Office reported last month that Americans pay another surcharge for ethanol in higher food prices. CBO estimates that from April 2007 to April 2008 "the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices." Ethanol raises food prices because millions of acres of farmland and three billion bushels of corn were diverted to ethanol from food production. Americans spend about $1.1 trillion a year on food, so in 2007 the ethanol subsidy cost families between $5.5 billion and $8.8 billion in higher grocery bills."

In addition to the extra cost to American consumers, the Environmental Protection Agency's Office of Transportation and Air Quality -- explains that the reduction in CO2 emissions from burning ethanol are minimal and maybe negative.  The article further points out:

"Both CBO and EPA find that in theory cellulosic ethanol -- from wood chips, grasses and biowaste -- would reduce carbon emissions. However, as CBO emphasizes, "current technologies for producing cellulosic ethanol are not commercially viable." The ethanol lobby is attempting a giant bait-and-switch: Keep claiming that cellulosic ethanol is just around the corner, even as it knows the only current technology to meet federal mandates is corn ethanol (or sugar, if it didn't face an import tariff)."

The increased use of ethanol has not been the success that was hoped.  It has been a boon to corn farmers and that's about it.  Because it has been good for the agricultural states, Congress has been reluctant to end an unsuccessful program.  Someone needs to find the courage to say that ethanol in America has not worked and that we need to develop our other energy resources. 

It's ironic that when there are places in southern California where oil is literally seeping through the ground and causing pollution, the government will not allow us to drill for that oil yet we subsidize a fuel program that does not work

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This page contains a single entry by Granny G published on June 2, 2009 6:07 PM.

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