Time to cut fed subsidy for ethanol

It now seems clear that growing corn to produce ethanol makes neither business nor environmental sense, and it's time to gradually withdraw government support for this industry.

Ethanol once seemed to be a bright spot in America's energy outlook. We have an abundance of farmland and an agricultural industry second to none. We are good at growing corn, and corn can be turned into an additive for gasoline.

So, the U.S. Congress chose to build an ethanol industry by heavily subsidizing its production. Not only that, it slapped a large tariff on foreign ethanol producers to keep them from competing with our producers.

Now, 10 years later, scientists and environmentalists agree that it takes as much or more energy to produce a gallon of ethanol as you get from burning it, and that the environmental damage may be greater than burning plain old gasoline.

What's more, many complain ethanol reduces horsepower, gums up small carburetors and eats through flexible hosing found on boats and other small motors.

Yet, government handouts have a mysterious way of living on even after the original purpose for them has disappeared.

Despite terrifying federal deficits and a newly energized Congress dedicated to cost-cutting, the ethanol subsidy is poised for renewal.

Legislation moving through Congress to renew the Bush-era tax cuts includes the 45-cent-per-gallon subsidy on ethanol as well as the 54-cent tariff on imported ethanol.

This will do three things: Cost taxpayers about $5 billion per year for the subsidies, cost them more for gasoline at the pump and raise prices for a host of food products.

And, of course, it will show that horse-trading, log-rolling and lobbying — in other words, business as usual — are still the way policy is made

Large investments were made with government encouragement in ethanol plants and equipment, so the subsidy cannot be cut suddenly or completely.

It can and should, however, be phased out over a period of years.

With agricultural prices high in Midwestern farm states, this would be the best time to start.

source: sunjournal