Unintended Consequences of Simple-Minded Environmentalists

• MARCH 16, 2009, 5:51 A.M. ET

Everyone Hates Ethanol

http://online.wsj.com/article/SB123716798764436701.html

To recap: Congress and the ethanol lobby argue that if some outcome would be politically nice, it should be mandated (details to follow). Then a new round of market interventions is necessary to fix the economic harm resulting from the previous requirements, while creating more damage in the process. Ethanol is one of the most shameless energy rackets going, in a field with no shortage of competitors.

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Let us be specific: the boondoggle is for corn-based ethanol which has really nothing to recommend it but the pork-barrel proclivities of Midwestern legislators.

1) When one factors in the oil-derived basis of fertilizer, diesel fuel used in farming, and the fact that ethanol cannot be transported by pipeline but has to be trucked around, the fossil-fuel-derived energy savings is close to nil and the carbon footprint is not helped

2) The cost is higher than for gasoline and requires subsidy to make it competitive when its inclusion to the tune of 10% of pump gasoline.

3) Its energy content is lower than that of gasoline and so the mileage per gallon goes down.

4) This argument doesn't hold for sugar-based ethanol ( and, eventually, for cellulosic ethanol when that becomes feasible ) which is more energy- and financially- efficient. What does Congress do? It imposes a 50 cent/gallon tax on sugar-based ethanol from Brazil.

5) How did ethanol get a kick-start? It was when MTBE, a fossil-fuel-derived oxygenate added to gasoline, was banned by American environmentalists due to instances of ground-water contamination in Lake Tahoe and some other places (from gasoline spills). Ethanol was put forth as both an oxygenate and as a substitute for gasoline. Ordinary automobiles can take no more than 10% ethanol because it corrodes engine parts. Special construction of engines is needed to take higher ethanol content up to a maximum of 85%.

6) The use of corn-based ethanol, subsidized for use in transportation fuels, raised the price of food across the spectrum ( meat products come from animals raised on corn ).

The benefits of ethanol have been demonstrated to be nil and yet the mandates to use it continue and are scheduled to rise.