The other energy scandal: ethanol

Townhall.com ^ | August 28th, 2002 | Michelle Malkin

[Sabertooth]

Prosecutors snagged their first guilty plea in the Enron energy scandal last week. Former executive Michael Kopper admitted to money laundering and conspiracy to commit wire fraud. He has promised to forfeit $12 million in illegal profits, which will be distributed to Enron victims.

Now, if only taxpayers could get some of their money back from a far bigger corporate energy fraud that continues unabated in Washington: Ethanol.

The corn-based fuel is backed by both Democrats and Republicans, who are hungry for contributions from agricultural conglomerate Archer Daniels Midland (which owns 41 percent of U.S. ethanol production capacity) and desperate for votes from the farm belt (where 98 percent of the nation's ethanol plants are located). According to The Washington Post, Senate Majority Leader Tom Daschle, D-S.D., supervised the writing of a section in the Senate-passed energy bill requiring gasoline refiners to nearly triple the use of ethanol by 2012.

After 2012, this anti-free market maneuver would guarantee ethanol a growing fixed share of the country's fuel consumption every year, no matter what consumers actually demand or what better methods of reformulating gasoline come along.

House Speaker Dennis Hastert, R-Ill., and Minority Leader Richard Gephardt, D-Mo., both from corn-fed states, support Daschle's corporate welfare mandate, as does President Bush. "Ethanol is good for our economy, it's good for our air," President Bush asserted earlier this week during a swing through Iowa and South Dakota urging passage of the energy bill.

That's not what a recent internal administration document showed. A little-noticed memo from the Office of Management and Budget reported in June that both Bush's own Council of Economic Advisers and the Federal Trade Commission believe the ethanol mandate "is costly to both consumers and the government and will provide little environmental benefit."

The panels concluded that a jump in ethanol consumption would increase gasoline costs and might create fuel supply shortages on the East and West coasts. Retrofitting refineries to produce an ethanol blend could add at least 3 to 5 cents to a gallon of gas. In California, the mandate could raise fuel costs by nearly a dime per gallon; in New York, it could mean a de facto gas tax hike of more than 7 cents per gallon.

The ignored advice from Bush's experts is consistent with reams of past findings on both the economic and scientific fraud that is ethanol.

Cornell University agricultural researcher David Pimentel, who chaired a Department of Energy panel that investigated ethanol production several years ago, published an analysis last year showing that about 70 percent more energy is required to produce ethanol than the energy that actually is in ethanol. "Abusing our precious croplands to grow corn for an energy-inefficient process that yields low-grade automobile fuel amounts to unsustainable, subsidized food burning," Pimentel concluded.

As for the environmental "benefits," the National Academy of Sciences concluded that ethanol had little impact in improving ozone air quality. While ethanol can reduce carbon monoxide emissions, it also increases emissions of volatile organic compounds and nitrous dioxide, the most common precursors of smog.

When you add up all the targeted government subsidies for ethanol, including federal price supports, a generous federal excise tax exemption worth more than 5 cents a gallon at the pump, various tax credits, and subsidized grain exports, the taxpayer tab amounts to more than $7 billion over the last 16 years. (And ethanol still costs more than regular gasoline.) These government giveaways are on top of the abominable $200 billion farm bill signed into law by President Bush, which will pay farmers some $4 billion a year to grow more corn for subsidized ethanol production.

It's not the small family farmers that reap the rewards. It's the suits at ADM, whose every $1 of profits earned by ethanol operation is estimated to cost taxpayers $30.

This corporate bilking of the public, and the Beltway collusion that enables it, ought to be criminal. But instead of leading the ethanol crooks away in handcuffs, Tom Daschle and President Bush kneel at their feet -- waiting for the donations and votes to roll in while the corn goes up in smoke.

Contact Michelle Malkin | Read her biography

©2002 Creators Syndicate, Inc.

[My2Cents]

People need to understand that we do not have the infrastructure in place to make ethanol affordable at this time.

You're absolutely correct, especially considering transport of ethanol into California. This is one reason the refining industry resisted ethanol when the reformulated gasoline regs were being written in the early '90s -- there's no way to get a sufficient amount of ethanol to California's refineries.

[My2Cents]

This is a case of American corn farmers vs. Canadian methanol producers (a main ingredient of MTBE). But the pollution of MTBE in groundwater forces alternatives, which may make (eventually) ethanol (or ethanol-based ETBE) competitive.

[dalereed]

You're nuts!

I've never run ethanol but i've had a lot of experience running methanol, basicly the same thing and except for being expensive (we had to pay 65 cents a gallon buying it by the drum in the mid 50s and Shell was the only producer) it's a lousy fuel. It only has about 1/3 the heat of combustion that gas does so where we could make a 1/4 mile run on less than a gallon of gas it took over a gallon of alcohol and mixed with 90% nitromethane 5 gallons / 1/4 mile. The only thing good about it was that it burned slower than gas and if you poured enough through the engine you could get more hp.

It also raised hell with fuel systems, that is why people have expensive repair bills if they buy the crap made by ARCO, it has alcohol in it as does Union 76 (now Tosco) as of a few months ago. Anyone that uses it is asking for expensive trouble plus reduced mileage.

[apochromat]

As I said before, there is no reason a vehicle engine that runs well and cleanly on ethanol or ethanol mixtures cannot be produced.

[dalereed]

There is a reason it can't be done and you can't overcome it, it's called the heat of combustion between the 2. There is no way you can increase the amount of energy in your crappy alcohol, it's called chemestry.

They could make crude oil from garbage cheaper than making alcohol, it was done at MIT in the 50s but the cost at the time was was about $12/barrel and crude was only about $3.

Don't start the clean air BS with me, I was born and grew up in Los Angeles in the 40s and early 50s when smog was 10 times worse than now. I wish it was back to those levels, no one that was raised in it suffered one bit, only the imigrants. If we had it back maybe all the complainers from the midwest and east would go back to where they came from.

[hopespringseternal]

Industry can be shortsighted, needing outside scrutiny and guidance.

Those are your exact words.

So, how long have you worked for ADM?

If ethanol was such a great idea, no one would need to subsidize it.

Maybe you guys at ADM should try making an honest living rather than ripping off taxpayers.

[apochromat]

Are you sure you aren't merely upset because of all that tasty alcohol going to waste? Just kidding.

[apochromat]

If you demand to get more miles per gallon from ethanol than from gas, then that's your pointless crusade.

[apochromat]

I could give a cr*p about ADM. Ethanol isn't a trademark.

[dalereed]

"If you demand to get more miles per gallon from ethanol than from gas, then that's your pointless crusade."

If it costs more and is less efficent than gasoline it should wind up in the trash heap of history!

Anyone that would even think about designing something less efficent than what is presently used should be locked up in a nut house for life!

[apochromat]

You can't forsee any circumstances where gas becomes in short supply? Are you sure industry will be fully prepared if that happens intermittently and rapidly?

[apochromat]

Nut houses are big in your mental landscape, I suppose.

[dalereed]

If things get critical the government (s) will be forced to take the excessive taxes off of oil (last hard figure I had was 86% in 1974) and the oil fields here will be reopened and we have well over a thousand years supply here.

As for nut houses, there are far too few for the goofballs that belong in them.

[apochromat]

You can't back up those numbers, and they look wildly optimistic to me. History shows intermittent gas shortages. Now you're implying that middle east oil is irrelevant and that it's a government plot to make it relevant.

[apochromat]

It's a big government plot to keep us dependent on foreign oil, you say? There may be lots of examples of bad government out there, but I hope you understand that one's a bit too hard to swallow.

[dalereed]

The 86% figure was from Joe Shell, who at the time was the president of the Independant Oil Producers of California.

The 1000+ years was from a VP of Union Oil of California.

There is enough oil in known reserves in California to run the country for at least 500 years.

If there is an interm gap in production maybe we can figure out how to burn environmentalist in our cars.

They have to be cheaper and more readily obtainable than alcohol!

[apochromat]

The 1000+ years was from a VP of Union Oil of California

Oh well, if a VP of Onion Oil said it, it must be true.

[apochromat]

There is enough oil in known reserves in California to run the country for at least 500 years.

And who is your esteemed source for that estimate?

[apochromat]

So you feel the government is planning too far ahead and we should stop buying foreign oil, is that about it?

[apochromat]

I tend to look askance at statistics produced along with an exhortation to "burn" people.