"Constellation" of government ethanol support only getting brighter

In the U.S. election earlier this month, did you vote for or against corn ethanol? While ethanol may not have been on the ballot in so many words, the shift from Republican to Democratic control of Congress has had a lot of fallout in the green car world. One effect is the change of authorship of the upcoming reauthorization of the 2002 farm bill. As Forbes' Jessica Holzer tells us, the bill was slated to be written by Sen. Saxby Chambliss of Georgia and Rep. Bob Goodlatte of Virginia, "two Republican southerners with soft spots for cotton, peanut and tree farmers," but will now be written by corn belt Midwestern Democrats Rep. Collin Peterson of Minnesota and Sen. Tom Harkin of Iowa. And these two will likely give the ethanol industry everything it wants, even though it gets a lot already. The "constellation" of government support Holzer writes about includes the "tariff on imported ethanol, subsidies for growing corn and blending the fuel, crop insurance and a guaranteed market: The Energy Act of 2005 required refiners to ramp up ethanol use from 2.5 billion gallons last year to 7.5 billion gallons by 2012."

How could the government support an industry even further? A raise in the ethanol subsidy is possible, as is a grant program to help ethanol plants switch to using renewable energy. And funding for cellulosic ethanol research is also possible. This ethanol industry needs all of this government support, Holzer writes, because "Wall Street's support of ethanol would dry up in a flash without all the government support."

That doesn't sound like sustainable energy to me.

[Source: Jessica Holzer / Forbes]

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