The Ripoff Joke that is Ethanol

Thursday, March 13th, 2008 12:30 pm by Neal

Don’t miss this Walter Williams article on the “ethanol hoax” and why it is a complete ripoff to consumers, environmentalists, and everyone that needs to eat.

Ethanol from corn (i.e., “American ethanol”) is a highly-subsidized, inefficient act of theft from American consumers, but a goldmine to politicians and agricultural companies like Archer Daniels Midland (ADM). Ethanol will NEVER replace gasoline, it is an environmental disaster, and it the government mandates on its usage are wreaking havoc with the prices of practically all food products. It is a hoax and a scam, and until Americans wake-up and scream at their greased, elected representatives in Washington, it will only get worse.

Ethanol contains water that distillation cannot remove. As such, it can cause major damage to automobile engines not specifically designed to burn ethanol. The water content of ethanol also risks pipeline corrosion and thus must be shipped by truck, rail car or barge. These shipping methods are far more expensive than pipelines.

Ethanol is 20 to 30 percent less efficient than gasoline, making it more expensive per highway mile. It takes 450 pounds of corn to produce the ethanol to fill one SUV tank. That’s enough corn to feed one person for a year. Plus, it takes more than one gallon of fossil fuel — oil and natural gas — to produce one gallon of ethanol. After all, corn must be grown, fertilized, harvested and trucked to ethanol producers — all of which are fuel-using activities. And, it takes 1,700 gallons of water to produce one gallon of ethanol. On top of all this, if our total annual corn output were put to ethanol production, it would reduce gasoline consumption by 10 or 12 percent.

Ethanol is so costly that it wouldn’t make it in a free market. That’s why Congress has enacted major ethanol subsidies, about $1.05 to $1.38 a gallon, which is no less than a tax on consumers. In fact, there’s a double tax — one in the form of ethanol subsidies and another in the form of handouts to corn farmers to the tune of $9.5 billion in 2005 alone.

There’s something else wrong with this picture. If Congress and President Bush say we need less reliance on oil and greater use of renewable fuels, then why would Congress impose a stiff tariff, 54 cents a gallon, on ethanol from Brazil? Brazilian ethanol, by the way, is produced from sugar cane and is far more energy efficient, cleaner and cheaper to produce.

Ethanol production has driven up the prices of corn-fed livestock, such as beef, chicken and dairy products, and products made from corn, such as cereals. As a result of higher demand for corn, other grain prices, such as soybean and wheat, have risen dramatically. The fact that the U.S. is the world’s largest grain producer and exporter means that the ethanol-induced higher grain prices will have a worldwide impact on food prices.

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