Saturday, April 22, 2006

Ethanol sucks

Ethanol is good, except when it's not
Carney Op-Ed in AFF Brainwash
by Timothy Carney

The Bush administration, like the Clinton administration and the first Bush administration, say that we subsidize ethanol because it's good for the planet. They explain that when ethanol is burnt in a car engine, it gives off much less pollution and CO2 than does petroleum. On that very specific claim, they are correct. However, some scientists argue that ethanol, on the whole, is worse for the planet: it leads farmers to plant only corn, thus degrading the soil; the fuel needed to grow, distill, and ship the ethanol is more than the end product yields; and it evaporates more easily, leading to more hydrocarbons in the air. But the federal government doesn't give these claims or studies much weight.

So, ethanol producers and sellers get all sorts of tax breaks, free gifts, and waivers from environmental rules. Congress has recently voted to mandate we use ethanol. The mandates and subsidies are needed, presumably, because few consumers would choose ethanol of their own free will, it being costlier. But we owe it to our planet, the politicians tell us, to use ethanol, whether we like it or not.

But our government is much more nuanced in its understanding than that. U.S.-made ethanol is good. Foreign ethanol, on the other hand, is bad. You see, one of the subsidies Uncle Sam gives ethanol is a break in federal taxes, worth about 52 cents per gallon of ethanol sold. This tax break happens when the fuel refiner sells his fuel to gas stations. That means the refiner can get the break by selling ethanol from Iowa or from Brazil. That, however, would be unacceptable.

So, Uncle Sam imposes a special tariff on imported ethanol of 54 cents per gallon. You see, Washington is ready to spend your money (or shift a higher portion of the tax burden onto your shoulders) to encourage ethanol, which is good for the air, but only if it is good, homegrown ethanol. Is the foreign ethanol any dirtier? No. Actually, because it's easier to turn sugar into ethanol than corn, Caribbean or South American ethanol might be cleaner on net.

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