So, Bush wants massive new ethanol subsidies. He wants 35 billion gallons of "renewable and alternative fuels" -- the vast bulk of which will be corn ethanol -- online by 2017.
Right now, there's basically no opposition to this push. It's got support from industry (mainly Big Corn and Big Auto), legislators from both parties, farmers, environmentalists, national security types, and the public at large.
That's not going to last.
It's clear that there's just not enough corn, or room to grow it, to get even to Bush's relatively modest target. As corn supplies are stressed, the price of corn goes up and the economic benefit of producing ethanol starts to wane. What to do? More subsidies? It's possible that cellulosic will ride to the rescue, but to do so it would have to undergo research breakthroughs and massive deployment in an extremely short period of time. Doubtful.
So what's the other way to boost ethanol supply? Import it from overseas. The administration is fully aware that removing the protectionist tariffs and subsidies that favor U.S. corn producers is inevitable. U.S. Energy Secretary Samuel Bodman said "he did not see subsidies to U.S. farmers remaining in place beyond 2010 or import tariffs on ethanol beyond 2008."
How will the political dynamic change at that point? It's difficult to predict such things, but I'd be willing to wager that all hell breaks loose.
When you introduce competition from cheap ethanol imports:
- You lose the support of the farm lobby and thus the support of midwestern legislators -- this is an enormous amount of pork on the line for them.
- You lose the support of Big Corn, which was practically created by federal subsidies.
- You lose the support of environmentalists, who probably won't cotton to ethanol imported on oil-burning ships from countries that clear rainforests to grow it.
- You lose the support of the national security crowd, which probably wasn't envisioning simply shifting our energy dependence to a different set of countries.
At that point, who's left? What's the benefit? Where's the support?
It may not be as cut-and-dried as all that. But it's nonetheless clear that much of ethanol's support is tied to the very economic and political arrangements that limit its usefulness.
Once the global market for ethanol is opened up, its unified domestic political support in the U.S. will fragment. It will come as a surprise to no one to learn that this strikes me as excellent evidence that ethanol is at best a bridge or niche fuel. Electrification's the way, baby!
Corn-based meat and ethanol: burning the planet to a crisp
Comments
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Tom Philpott Posted 5:18 am
26 Jan 2007
Second, of course, there's coal gasification. As DR well knows, the 35 billion gallons minimum includes "alternative fuels," ie liquid coal. There's a huge lobby behind this, and Tom Friedman himself has arrayed his rhetorical girth behind it. The bridge to electrification could break there, too.
Victual Reality
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mulad Posted 5:21 am
26 Jan 2007
But personally, I got a diesel car when I was needing new wheels last year. Biodiesel makes more sense in a lot of ways, but unfortunately it's still nowhere near as common as ethanol.
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David Roberts Posted 5:48 am
26 Jan 2007
I think once electric transport gets even that foothold, battery technology will improve, the cars will get more and more of their mileage from the electric motor, and it will become increasingly obvious that the electrical portion of the fuel is the cheapest, cleanest, and easiest.
Soon enough, a fully electric car will come along and the tribrids will be abandoned.
That's the hope, anyway.
www.grist.org
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meander Posted 5:54 am
26 Jan 2007
Keith Good's farm policy e-mail newsletter (sign up at farmpolicy.com) had this tidbit yesterday:
Mary Lu Carnevale, writing yesterday at The Washington Wire Blog (Wall Street Journal) noted that, "President Bush's plan to power up ethanol production is raising red flags among the nation's poultry and meat producers. They worry that rapidly rising ethanol production will further push up prices for corn, the main animal feed grain.
"'We estimate that ethanol demand has already increased the price of chicken by six cents per pound wholesale,' said the National Chicken Council's chief economist William P. Roenigk. 'If government continues to push corn out of livestock and poultry feed and into the energy supply, the cost of producing food will only increase.'"
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Biodiversivist Posted 7:38 am
26 Jan 2007
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
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bookerly Posted 8:10 pm
26 Jan 2007
http://www.washingtonpost.com/wp-dyn/content/article/2007...
If they continue to push ethanol, it will be very interesting to see the higher food prices all over...
patrick
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wavey Posted 4:37 am
27 Jan 2007
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