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Thursday, June 30, 2005

Forcing Corn On Us

Economist Alan Reynolds destroys the new energy bill and its ethanol subsidies in "Energy Piracy". Not only does this bill (supported by both sides of the aisle) remove the competition that drives the creation of new technologies and products, it also saddles the taxpayer with the cost of $42 billion over the next 5 years. And the whole science behind this "new" source of fuel is "quixotic".

Reynolds quotes a source that in order to convert corn into fuel oil, it takes 7 gallons of petroleum oil to produce 8 gallons of ethanol. That 1 gallon gain comes at the further cost of all the man-hours and machinery wear and tear that clearly exceeds that single gallon gain. Now, maybe you think that it is better to use a replaceable ear of corn versus a gallon of irreplaceable oil. But then what is the need of the oil if it becomes a discarded commodity? Why is it worth preserving if there are better alternatives? Anyone saving a ton of coal in their basements these days?

Reynolds also advises us that ethanol gets roughly 25% less mileage than gas. While the price of ethanol is subsidized at the pump (and who pays for that?), people will have to buy ethanol more often. More trips to the pump. How does that help poor people get to work?

Using government money, excuse me, our money, to subsidize Archer Daniels Midland and corn farmers for an uneconomic, inefficient product is wasteful and redirects capital from private industry where the real creativity always occurs. That is another way of saying the government is taking our money from us while charging us more for something we do not want!

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