I can’t believe that we have already entered the presidential primary season, but we have.  The fact that the first primary in Iowa makes the issue of government subsidies to ethanol a more important issue than it might otherwise be.

Yesterday The Weekly Standard posted an artice on ethanol and the comments of some politicians either supporting government subsidies for it or supporting the end of government subsidies.  The article opens with an Al Gore statement that his support for ethanol was related to his having the support of the farmers in Iowa when he was planning his presidential run.  Newt Gingrich claims that he supports ethanol because it will help America become energy independent. 

The article reports:

“Gingrich declared his commitment to make America energy self sufficient, in part through ethanol. The applause line/press lead of his speech: “if my choice is Iran, or Iowa, I prefer the money in Iowa. If my choice is Saudi Arabia, or South Dakota, I prefer the money in South Dakota.”” 

This is a nice soundbite, but is somewhat truth-challenged.  The article points out that in 2010 and in 2011 our biggest oil suppliers were Canada and Mexico–both NAFTA partners.  Our oil money is generally not going to Arab countries. 

The article further points out that one of the major reasons for the high cost of gasoline is the devaluation of the American dollar.  It has depreciated against both the Canadian dollar and the Mexican peso. 

Tim Pawlenty, former governor of Minnesota, also running in the Iowa primary, has come out in support of a gradual end to federal ethanol subsidies.

It will be interesting to see how the voters in Iowa react to the positions of both of these candidates.