Ethanol Needs More Subsidies To Survive

What do you do when even with subsidies an industry can’t survive? Naturally, subsidize it some more.

That’s the situation with corn ethanol. Despite tariffs on imported ethanol, tax credits and use mandates the industry continues to struggle. Falling gasoline prices and decreased driving have added to its woes.

To solve this problem the industry wants Congress to allow ethanol levels in gasoline blends of up to 15% from the current level of 10%. There’s concern that such levels could harm engines and possibly result in a net increase in air pollution.

Ethanol has been an experiment gone bad. It’s time to let it die a dignified death. Will that happen? No.

Boone Pickens likes to tell the story of the education Bob Dole gave him with regard to ethanol many years ago. Pickens kept nagging at Dole about the dis-economies of ethanol. Finally exasperated, Dole said to him, “Quit talking down ethanol. You need to understand something: There are 21 farm states, and that’s 42 senators. Those senators want ethanol. Are you getting the picture?” That’s what the economics of ethanol are all about.

more: here and here

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