TeeJaw Blog

Will The Ethanol Boondoggle Ever End?

Posted in Government and Politics by TeeJaw on Saturday, June 25, 2011, 8: 07 AM

You know there was a strong bipartisan vote in the Senate recently to end the ethanol subsidy. That’s a good thing and many think it signals the end of the ethanol boondoggle. Not so fast. Too many of the senators who voted to end the subsidy were quick to point out that the Federal mandate requiring ethanol to be blended into all gasoline sold at the pump will continue, no matter what.

If the government stops paying the annual $6 Billion subsidy that creates the artificial market for ethanol, but continues to force consumers to buy ethanol, what do you suppose will happen? Won’t Iowa farmers will still be selling corn to ethanol plants and won’t those plants will still be selling ethanol to gasoline refiners? Yes, because if the mandate is not abolished the government will continue to require refiners to blend billions of gallons of ethanol into gasoline every year. The only change is that the government won’t be paying for the ethanol any more.

Ending the subsidy and keeping the mandate will merely change who pays for the ethanol. Actually, that’s not right. It’s not “who” pays but “how” we pay. We already pay for the ethanol subsidy through taxes. When the government ends the subsidy consumers will pay it in the form of increased prices at the gas pump. It still won’t be a free market. If a free market for ethanol were ever allowed to exist ethanol would disappear overnight.

It’s even worse. Our taxes are not going to be reduced by the $6 Billion savings to the government from eliminating the subsidy. So when price of gasoline at the pump goes up enough to pay for the ethanol in the gas, consumers will effectively be paying for it twice. They’ll still be paying the same taxes along with the higher price at the pump. That’s the inescapable result from eliminating the subsidy and keeping the mandate.

Ethanol is not good for anything. To say it does more harm than good is wrong because it does only harm without any good whatsoever.

Liberals who claim to care for the poor people of the world might note how the artificial demand for corn that will remain because of the ethanol mandate will keep food prices artificially high around the world. The impact of that falls mainly on people in impoverished regions eking out a subsistence living. That includes beef, a source of protein for humans, because corn is food for cattle.

Ethanol is a defective product in and of itself. Its claimed environmental benefits are highly suspect, not only because it’s 35 percent less energy-efficient than gasoline. Its proponents have little credibility for themselves or their claims because they are also on record as favoring high European style gasoline prices. Ethanol is a convenient subterfuge for that agenda. Ethanol corrodes pipelines and storage tanks. It’s harmful to engines. Small two-cycle carbureted engines in chain saws and grass trimmers literally choke on it. For those engines you are allowed to buy ethanol free gasoline that is sold in cans for about $9 a pint. To my knowledge there is no way to get ethanol free gasoline to use in 4-cycle lawnmower engines which really need it because their engines also run on carburetors. [If you try putting the pre-mixed oil and gasoline fuel sold for chain saws in your 4-cycle lawnmower engine the mistake will become quickly apparent and will damage the engine]

Many will attribute the ethanol boondoggle to well-intentioned government meddling resulting in costly, damaging, unintended consequences. I don’t buy the well-intentioned part. Even if you do, good intentions don’t matter when the results are awful and plain to see.

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  1. Corn Ethanol — Who Pays and Who Benefits? « TeeJaw Blog said, on Sunday, October 9, 2011, 10: 44 AM at 10:44 AM

    […] in Government and Politics by TeeJaw on Sunday, October 9, 2011, 10: 44 AM Back on June 25th, Will The Ethanol Boondoggle Ever end?, I said […]


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