Ethanol: How Many Senators Does It Take to Screw a Taxpayer?

By The Burning Platform

“Today, the government decides and they misdirect the investment to their friends in the corn industry or the food industry. Think how many taxpayer dollars have been spent on corn [for ethanol], and there’s nobody now really defending that as an efficient way to create diesel fuel or ethanol. The money is spent for political reasons and not for economic reasons. It’s the worst way in the world to try to develop an alternative fuel.” Ron Paul

When bipartisanship breaks out in Washington DC, check to make sure your wallet is still in your pocket. Every time you fill up your car this winter you are participating in the biggest taxpayer swindle in history. Forcing consumers to use domestically produced ethanol is one of the single biggest boondoggles ever committed by the corrupt brainless twits in Washington DC. Ethanol prices have soared 30% in the last year as the supplies of corn have plunged. Only a policy created in Washington DC could drive up the prices of gasoline and food, with the added benefits of costing the American taxpayer billions in tax subsidies and killing people in 3rd world countries.

The grand lame duck Congress tax compromise extended a 45-cent incentive to ethanol refiners for each gallon of the fuel blended with gasoline and renewed a 54-cent tariff on Brazilian imports. The extension of these subsidies, besides costing American taxpayers $6 billion per year, has the added benefit of driving up food costs across the globe, causing food riots in Tunisia, and resulting in the starving of poor peasants throughout the world. This taxpayer boondoggle is a real feather in the cap of that fiscally conservative curmudgeon Senator Charley Grassley. He was joined in this noble effort by another fiscal conservative, presidential hopeful John Thune. It seems these guys hate wasteful spending, except when it benefits their states. The bipartisanship in this effort was truly touching, as Democrats Kent Conrad and Tom Harkin also brought home the pork for their states.

A bipartisan group of 15 senators signed a letter in late November demanding an extension of U.S. ethanol subsidies. I wonder if the fact they have received hundreds of thousands of dollars in campaign contributions during the past six years from pro-ethanol companies and interest groups like ADM, Monsanto, the National Corn Growers Association, and the Iowa Renewable Fuels Association had anything to do with this demand. You can always count on a Senator to do what’s best for his re-election campaign rather than what is best for the country. These symbols of political integrity will always spout the standard talking points:

  • Promoting ethanol reduces our dependence on foreign oil
  • Ethanol is green renewable energy
  • Ethanol is cheaper than gasoline

As we all know when dealing with a politician, “half the truth, is often a great lie.”

Amaizing

Corn is the most widely produced feed grain in the United States, accounting for more than 90% of total U.S. feed grain production. 81.4 million acres of land are utilized to grow corn, with the majority of the crop grown in the Midwest.  Although most of the crop is used to feed livestock, corn is also processed into food and industrial products including starch, sweeteners, corn oil, beverage and industrial alcohol, yogurt, latex paint, cosmetics, and last but not least, fuel Ethanol. Of the 10,000 items in your average grocery store, at least 2,500 items use corn in some form during the production or processing. The United States is the major player in the world corn market providing more than 50% of the world’s corn supply. In excess of 20% of our corn crop had been exported to other countries, but the government ethanol mandates have reduced the amount that is available to export.

Read full post at The Burning Platform

13 responses to “Ethanol: How Many Senators Does It Take to Screw a Taxpayer?

  1. Great article, if you work for Big Oil. These are the quasi-arguments they’ve used for years to encourage Middle East oil and wars, with a Deepwater Horizon or two thrown in for good measure. Bad, bad ethanol. Let’s import more oil!!!!

    • Chinadog what ethanol company do you work for? The ethanol industry is like cockeroaches in a housing slum, when you turn on the light they scatter but after a bit they come out and do what they want. Corn ethanol is nothing but a welfare program.

      • Nice try, Suka. I’m just a farmer who got very interested and educated about alternatives to petroleum when we had gas lines in the 70’s. I can totally understand the perspective that “ethanol is nothing but a welfare program” and, using that same criteria, understand that imported gasoline is nothing but a welfare program, too. What’s your petroleum alternative, if not the “cockeroach” ethanol industry?

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  3. Unfortunately there are a few facts that seem to get lost in the whole corn ethanol discussion. (1) One of the leading driving forces for the corn ethanol industry in the 70’s and 80’s was the need to increase the value of US corn specifically and US agriculture in general. At the time several US farmers were struggling or going bankrupt because the value of their “product” was below their production cost. While it took awhile for the ethanol industry to grow and reach a sufficient size to be meaningful, the concept worked and corn is now at a higher value and American farmers are seeing a meaningful profit for their efforts. (2) Linked to the very low cost of American corn was a concept that third world countries were not developing their own agricultural interests because they could not do so at a cost low enough to “compete” with foreign grains. It was firmly pushed by the UN and others that a component of fostering more local agriculture in third world countries was to increase the cost of foreign grains. Again, the program took awhile to become a reality but the cost of US grains have gone up in accordance with this well accepted plan. (3) The “cost” of ethanol to US consumers both in real costs and hidden costs due to tax subsidies and grants absolutely pales in comparison to the US Oil Industry. There are many reports and analysis out there, but factoring in the many real and hidden costs gasoline, including the cost of US military to stabilize and secure oil supplies, is much much more expensive than ethanol. When you also factor in the fact that the US is sending literally billions of dollars to countries that really don’t like us or our way of life it is even sadder. (4) Corn that is used by “dry mill” ethanol plants to produce ethanol only use the starch fraction of the corn. The protein, fiber, fat, etc. content of the corn is not consumed in the fermentation process and becomes an animal feed co-product. So, only the low value starch is used to make ethanol while the higher value protein and oil are passed back into animal feed market – which displaces corn. (5) Corn ethanol is not and never was designed to be “The Answer”. As a country we consume far too much energy to have one answer. None of the answers are perfect, they all have costs and drawbacks and corn ethanol is certainly not an exception to that. The problem is that many of the really great answers conceptually are either not ready for prime time because of technology or cannot be scaled up to a meaningful energy amount. Clearly we cannot as a country or as a species continue consuming oil blindly without making real progress on alternative. The real answer is to keep working on conserving energy when possible, exploring new technologies in a way to make them viable and commercial and to keep improving the current technologies that we have to provide more value with less energy inputs. This is all happening, but for the good of us all we need to accelerate that process even faster.

    • Well put. It’s not far fetched to think that cellulosic ethanol and non-frac NG could provide almost all of our liquid fuel needs within a decade.

      And even using today’s milling technology, DDGS can be a valuable human foodstuff. I remember doing a study for Commerce/AID on that in 1975.

  4. Cellulosic ethanol? Really? ROFLMAO. At least your saying “within a decade”, not the normal “a commercial process for cellulosic ethanol is just five years away” that we have been hearing for the last 30+ years at the cost of hundreds of millions of taxpayer dollars. The only problem is that according to the cast in stone table in the federal RFS mandate in EISA 2007, cellulosic ethanol is supposed to be producing more than 3 billion gallons of ethanol by 2015 and all of the ethanol increases required after 2015 out to 2022 must come from cellulosic ethanol. For 2011 the more than 30 companies trying to find a commercial solution to produce cellulosic ethanol couldn’t even produce close to the 250 million gallons required by EISA 2007, the EPA let them off the hook with a requirement of perhaps 6 million gallons. For more than 30 years the taxpayers have been subsidizing ethanol in all of its forms and what do we have to show for it? Decreased mileage in our cars, damage to many kinds of engines that were never designed for ethanol blended fuel, and an energy source that is now more expensive than gasoline driving up energy costs in a declining economy.

    • The statement was “cellulosic ethanol and non-frac NG could provide almost all of our liquid fuel needs within a decade”. I feel it’s a reachable goal we should work towards. The taxpayers have been subsidizing gasoline in all its forms for longer than 30 years and what do we have to show for it? Trillions of dollars of oil imports and military fun in the Middle East sun. And my trips in ethanol Fords in Brazil, and NG Toyotas in S.E. Asia tell me it’s not a pie-in-the-sky vehicle technology, either.

      Too many of us want to stay with the status quo, despite the damage, asking for their wake-up call when the oil ultimately runs out.

    • Sorry to rain on the anti-ethanol parade, but it’s coming soon….
      http://www.coskata.com/media/?story=1039F848-CD91-4401-9511-B507D6A02DEE

  5. The concept of this article ties a lot together. Monsanto and the revolving door, why their big money makes the government happy, and so on. People pay attention to the talk of food riots this spring. Even if you dont believe it, never hurts to disaster prep.

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  7. Pingback: America’s Message to the World: Fuel Trumps Hunger | Mohawk Political

  8. Pingback: America’s Message to the World: Fuel Trumps Hunger - News Radio 970 KBUL

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