Ethanol, Politics, and the Law of Unintended Consequenses.

Ethanol is the hottest product since sliced bread!

Politicians and pundits are falling all over themselves to get on the Ethanol bandwagon. The number of ills that Ethanol can allegedly cure, rivals the claims made by the slickest snake oil salesmen. Here are just a few: we can grow corn at home so Ethanol will reduce our dependence on foreign oil; corn is a renewable resource, so Ethanol is better for the environment; most important, (at least to much of the liberal establishment) it will weaken the power and profit of "Big Oil".

But is Ethanol the panacea that it is portrayed to be?

The answer is, at best, mixed. First, there is the question of "energy balance", that is the amount of energy used to create a standard unit of a product. There are some critics who say that it requires more energy to produce a gallon of Ethanol than a gallon of Ethanol provides (See annexed USDA Report). A gallon of oil, on the other hand, produces approximately 5 times the energy needed to get it to market. A recent report by the Congressional Research Service indicated that "most studies give corn-based Ethanol a slightly positive energy balance". One example of this problem: most oil is shipped through pipelines requiring little energy use. Almost all Ethanol is shipped by truck and rail, trucks burning diesel and trains using coal.

There are also questions regarding the environmental impact of Ethanol. Most of the plants that convert the corn to Ethanol are coal burning. Although we have made great strides in coal burning technology, there is still a negative environmental impact.

The unintended consequences are also interesting. Corn prices have skyrocketed. Over the past five years, the amount of corn used for Ethanol has gone from 7% of the total to 18%. Some are concerned that 50% of the corn crop will be headed for ethanol use by 2008. Since over 50% of the crop has traditionally been used for livestock feed and 20% for human food consumption, prices for many food products, including meat and poultry, cereal, soft-drinks and syrups, will soar and/or shortages may result. Proponents counter that more land will go into agricultural production to make up for the difference. But, once again, environmentalists are worried about loss of forests and increased uses of fertilizer.

It all comes down to politics. First, "Big Oil" is the liberals' favorite whipping boy. Anything bad for oil companies is good . Never mind that profit margins in the oil industry are far lower than in most major industries. Never mind that the product they provide has uses in virtually ever aspect of human life. Meanwhile ending our dependence on foreign oil is such a pervasive mantra in Washington, that any alternative to giving Arabs any more oil money is an "obvious" good. Of course, this may overlook the inconvenient fact that more than 50% of the oil we use in the US comes from Canada.

We can't let facts get in the way when there's a Presidential election coming and Iowa is an important early test state. John McCain and Hillary Clinton are now big supporters of Ethanol even though they were both against huge Ethanol subsidies before they were for them. And, with Sen. Tom Harkin (conveniently, from Iowa) as new chairman of the Senate Agriculture Committee, its likely that Ethanol research and subsidies will steam ahead unabated. Here in the Rochester, NY area, everyone is thrilled about the new Ethanol plant that is being built, again with large government subsidies.

My final point goes back to my general criticism of the media. Have you seen or heard any news report challenging the "good news" about Ethanol? You would really have to be a news geek to find many stories offering the opposing view because they have not appeared in any msm outlets. The US News and World Report just did a cover story on Ethanol (Feb. 12). It is the first major news outlet to even discuss the issue from both sides.

Its a good story, but well overdue. And don't expect them to be congratulated for exploring the issue. There are too many people and organizations with a big stake in the success of Ethanol for this juggernaut to be slowed down. As I noted above, there is a new plant being built near Rochester. The local newspaper, the Democrat & Chronicle, has lauded the plant. Funny though, there was no explanation of how this government-subsidized, coal-burning Ethanol plant fit into the context of earlier stories and editorials critical of pork barrel spending and global warming.

That just wouldn't fit the template.