Another Blow Against Ethanol

Al Gore thinks ethanol is a bad idea. Members of Congress on both sides of the aisle want to kill the taxpayer funded subsidies for ethanol and remove the tariffs from foreign ethanol. But you really know ethanol subsidies are in deep doo-doo when even the Washington Post believes tax dollars are being wasted on something that should be able to survive on its own.

For decades, the idea behind corn ethanol has been that fuel derived from the crop could diminish America's dependence on distasteful foreign regimes for fuel - it's done some of this - and cut carbon emissions - it's done little of this. Congress established an overlapping and expensive system of subsidies, requiring that billions of gallons of ethanol be blended into the nation's gasoline, slapping tariffs on foreign ethanol and handing those who blend the fuel into gasoline a tax credit of 45 cents a gallon.

In other words, the government pays the industry for the privilege of selling to a captive market, spending $6 billion in 2009 on the tax credits alone. Without the tax credits, the amount of corn ethanol produced would still increase over the next 10 years, the Agricultural Policy Research Institute at the University of Missouri calculates.

While subsidies may have been used to start the corn ethanol industry, the reason for them to continue no longer exists. If the ethanol industry cannot stand on its own by now then it should be allowed to fail. It isn't up to the taxpayers to keep funding it. Either it will survive or it won't.

And to this point no one has convinced me it's even a 'necessary' industry as I find the argument put forward about the need to include ethanol in gasoline to be weak. In some cases it's caused problems far beyond any perceived benefits and at a cost to consumers in the way of more frequent repairs to some fuel systems that don't tolerate ethanol very well.