Comments on: Let Ethanol Fail

By: TRUTH ON THE MARKET » Another Type of Compassionate Conservatism

TRUTH ON THE MARKET » Another Type of Compassionate Conservatism — Tue, 25 Sep 2007 02:38:57 +0000

[...] show up. So we got a $250 billion handout in the May 2002 farm bill, and utterly nonsensical ethanol mandates loom on the [...]

By: TRUTH ON THE MARKET » Midwest Farmers 1, Environment 0, Poor People -1

TRUTH ON THE MARKET » Midwest Farmers 1, Environment 0, Poor People -1 — Sun, 18 Mar 2007 13:46:42 +0000

[...] say we require ethanol to stand on its own two feet, and if it can’t, let it fail. Filed under: politics , markets , environment , regulation Permalink | Trackback URL | [...]

By: al

al — Thu, 08 Feb 2007 17:15:03 +0000

Your thoughts seem to be headed towards us spending our money on energy outside of the US,
and consentrate on growing food with no goverment help, or are you just mad about the Ag bill?

By: M

Wed, 07 Feb 2007 23:59:33 +0000

Without getting into a full argument on the value of biofuels, I am concerned that your subsidized value of current fuels might be under represented. At least from a national security perspective, we must consider what the national costs are of an economic dependency in the oil-rich areas. Simple, and direct, price support might not fully capture the cost to the consumer (and its government) of our current energy plan. While it is certainly possible that adjusting for these values would not change the imbalance noted above, it is an important value to substantiate for comparison to any other alternative energy source.

Also with regards to green-house gasses, I believe the argument in favor of biofuels is not that they produce less carbon dioxide, but that they recapture carbon dioxide with continued production. They are carbon neutral. The other gases, being substantially smaller in composition, and not being a required output of energy transformation, are perhaps better addressed through the mechanics of increased engine efficiency and exhaust treatment.

Finally with regard to the government subsidies, I have to agree that proactively selecting energies negates the benefits of market competition. I do feel however, that actual cost of production should be encompassed in the cost of fuel. A rather substantial tax should likely be imposed on oil to encompass its national cost to both security and health. This cost should probably be inflated to encourage alternative fuel development and preempt a more costly change with predicted future oil procurement difficulties (either peak oil or Chinaâ€™s increased consumption depending on your ideology). You can see that such a tax would be politically costly. Subsidizing a fuel that encompasses such a small market share is comparatively cheap to the consumer compared to taxing the predominant fuel in the market. While our politicians are certainly lacking in courage on the issue, the real culprit is the consumer, which has effectively selected the lesser of evils. I think true believers in economics, such as yourself, will need to start advocating a complete solution instead of selectively criticizing part of the current solution before a real change can occur.

By: Frank Pasquale

Frank Pasquale — Wed, 07 Feb 2007 16:35:02 +0000

I cannot agree more. Great job debunking the ethanol myth.

By: Ron Steenblik (Global Subsidies Initiative)

Ron Steenblik (Global Subsidies Initiative) — Wed, 07 Feb 2007 03:28:09 +0000

Mr. Lambert: Your readers may be wondering from where the subsidy estimates in your article come. If so, you can point them to our study, Biofuels–At What Cost?: Government Support for Ethanol and Biodiesel in the United States (click on the blue title in the text to download the PDF version).

We have also issued an update, estimating that meeting President Bush’s proposed 35 billion-gallons-a-year “alternative fuels” standard for 2017 with biofuels would cost taxpayers at a minimum $118 billion over the next 11 years. And that is counting only the federal volumetric ethanol excise tax credit (VEETC). State-level incentives could add tens of billions of dollars to that estimate. See the latest issue of our monthly bulletin, Subsidy Watch.

(I tried to include the direct link here, but it won’t show up on your page for some reason. So here is the URL to cut and paste:)

http://www.globalsubsidies.org/rubrique.php3?id_rubrique=33#costing%202