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Forum Post: Ethanol Subsidies

Posted 12 years ago on Nov. 27, 2011, 12:04 p.m. EST by timkerian (8)
This content is user submitted and not an official statement

Subsidies in general must be discussed more, directing public funds in support of select industries and corporations are a significant issue causing significant economic strain for the benefit of very few. Their intent is inherently to subvert a free market to benefit the financially endowed, who constantly use misleading 'proofs' and fear tactics to justify thier support.
I recognise that at times subsidies can be used to encourage a long term goal, but the ethanol mandate in particular is misguided. While our govornment abandons new clean air requirements that would have an impact for economic reasons, ethanol is forced onto the public - resulting in enriching commodities traders, blenders and oil companies at the publics expense.
This even now when virtually all recognise that ethanol production consumes huge volumes of water and it in reality provides NO environmental benefit and is truely inconsequential in reducing our reliance on foreign oil (a fear and isolationist pr tactic).
Ethanol created using foodstocks is an economic abomination. The solution is natural gas powered cars. Maintaining production at existing ethanol facilities could be accomodated by using crops planted on public lands so as not to displace or compete with farmed crops. I like the idea of planting apple trees on large tracts of public lands, and allowing ethanol plants to harvest them while eliminating all subsidies. This must be a talking point of the coming election.

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2 Comments


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[-] 1 points by rsteenblik (1) 12 years ago

Good points. However, instead of offering a solution that does not require subsidies, you simply shift the argument to your personal favorite (it would appear): natural-gas-powered vehicles. T. Boon Pickens (http://thehill.com/blogs/e2-wire/e2-wire/193707-reid-pushes-t-boone-pickens-gas-plan-in-senate) would approve.

If there were a carbon tax on fuels, the market would sort out which fuel was best, and the government (and Occupy Wall Street activists) wouldn't have to pick winners.

It's ironic that you suggest planting apple trees for ethanol plants. For one, I have seen many apple orchards in the eastern United States ripped up to plant corn and soybeans, thanks to the stimulation of corn and soybean prices caused in part by policies to promote corn ethanol and soy-oil-based biodiesel.

In any case, accomodating existing ethanol plants by planting apple trees on public lands won't actually help them very much. For one, it would take at least 7 years before the trees bear any significant fruit. Second, apples cannot be so easily and cheaply stored as field corn. And, third, most of the large areas of public lands are quite a distance from the corn belt.

Details, I know. But such details matter.

[-] 1 points by timkerian (8) 12 years ago

Good points - but the natural gas is significantly cleaner as far as refining and burning as fuel. Additionally it also reduces reliance on foreign oil which is a significant argument used to justify ethanol subsidies addressing two significant issues.

A quick check of cost to consumer indicates about a 75% cost savings for the fuel and a 60% reduction in pollutants.

In Minnesota and many states there are significant tracts of public land, apples have a significantly higher sugar content than corn and would not require the annual maintenance of a row crop like Corn. Ultimately I have no idea which crop would be ideal, but fruit storage issues could easily be addressed by a pre refining process concentrating volume and preventing loss from rot... The issue I have is the food being removed from the suppy chain resulting in inflation - essentially a regressive tax.

I agree that the marketplace should decide in all cases, capitalism and free markets are the answer to many things - and would likely eliminate the ethanol industry entirely, however a large investment in ethanol and if there is no political will to abandon those efforts a replacement for their use of food products destined for the market may need to be considered. Using public lands to accomplish this that are not currently being tilled should be considered.

Thanks for responding

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