It takes so much land to grow corn to create ethanol that a lot of the corn necessary for our sustenance is being diverted to ethanol production. Meanwhile, people in Mexico have found it harder to buy the basic foodstuffs of life.
Mexico is in the grip of the worst tortilla crisis in its modern history. Dramatically rising international corn prices, spurred by demand for the grain-based fuel ethanol, have led to expensive tortillas.How did these ethanol tycoons get so big? On the backs of the American taxpayer, of course.
The greens, hawks, and farmers helped convince the Senate to add an ethanol provision to the energy bill—now awaiting action by a House-Senate conference committee—that would require refiners to more than double their use of ethanol to 8 billion gallons per year by 2012. The provision is the latest installment of the ethanol subsidy, a handout that has cost American taxpayers billions of dollars during the last three decades, with little to show for it.Ethanol can now be made from wheat. At a time when production of wheat is down and demand is up, I don't think diverting more wheat to ethanol is a very good idea.
The monthly report, called World Agricultural Supply and Demand Estimates, projected a lower wheat crop for the 2007 year with exports expected to rise 25 million bushels higher. At 280 million bushels, the year's ending stocks are projected to be the lowest in 60 years.Ethanol is NOT where it's at, unless you are a friend of someone in the federal government.
Hybrid vehicles are much more beneficial to society, yet ethanol is getting the subsidy. It must not be what you know, but rather who you know in the case of ethanol.
I was sitting at the bank the other day waiting for an appointment, when I began browsing the government's 2008 Fuel Economy Ratings. Boring? No. Rather revealing!
In every model category in which there was one or more hybrid vehicle models, the hybrids far outperformed their gasoline counterparts.
What about ethanol vehicles? E85 (ethanol) vehicles have up to 85% ethanol mixed with gasoline. These E85 vehicles far underperformed their gasoline counterparts. In nearly every case, the maximum (highway driving) gas mileage of an ethanol vehicle was equal to or less than the minimum (city driving) gas mileage of the same vehicle powered by gasoline (most were less than). The efficiency of ethanol is something along the lines of 25% less than gasoline. Couple that with the fact that ethanol costs about as much in energy to produce as it provides, and I'm not sure why we're producing it, let alone that the government is paying a handful of people big bucks to put it on the market.
With free-market ingenuity, ethanol may eventually turn into a major contributor to our energy supply, but so far it's been fairly a waste of time. Ethanol has achieved its status only because it's been propped up by the federal government. Left to its own devices, ethanol would be where it belongs--still largely in the research phase.
Let the market decide what corn and wheat should be used for; for now, it seems that they should be used much more for food, instead of being diverted by inefficient government subsidies.