Obama's Misguided Ethanol Policy 19 comments
Steve Farrington
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Barack Obama is helping to ruin your summer BBQ’s. The New York Times ran an article Monday about the Obama campaign and its immense support of ethanol and subsidies.
Senator Obama certainly realizes his views tie in with rising corn and other grain prices: In a May 2008 interview, he said “And so there are a whole host of reasons why we're seeing problems with food supply. There's no doubt that biofuels may be contributing to it.” With oil rising and floods in the mid-west, corn supply has to be stretched- some going to ethanol production and some going to the grocery store- and at a premium.
“Mr. McCain advocates eliminating the multibillion-dollar annual government subsidies that domestic ethanol has long enjoyed. As a free trade advocate, he also opposes the 54-cent-a-gallon tariff that the United States slaps on imports of ethanol made from sugar cane, which packs more of an energy punch than corn-based ethanol and is cheaper to produce” (Rohter, 6/23/08).
There is no doubt Obama wants lower energy prices and cleaner fuel, but he is clueless about Economics 101 and how to get there. Opposing aspects of NAFTA and insisting on tariffs will not help our case for alternative energy. Brazil’s sugar-cane ethanol, the article points out, is much more efficient and cost effective. In the meantime, with his guarded views on trade, Obama is not helping ease oil tension by opposing more drilling in the United States. Should make for a great debate topic between the two candidates.
Though a separate issue, of course drilling in ANWR and off certain coastlines of the US would take years to affect the supply. Some critics cite fears of another oil spill, which is irrational. Rigs are drilling all over the world, why should the US be exempt if we have the technology to increase supply at some point.
Just last week, Obama commended the override of President Bush’s veto of the Food, Conservation, and Energy Act of 2008 – extending subsidies for corn ethanol. That’d be OK in moderation, but this bill proposed $288 billion in spending, in part for an alternative fuel that is actually harming the American consumer. More spending should be concentrated in Nat Gas, solar and wind power. And did I mention? Drill.
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This article has 19 comments:
He wants to renegiotate NAFTA. (ironically NAFT is the arabic word for oil). Bad Idea !!!! At least John McCain see this.
What he doesn't realize; there is a clause in the current version of NAFTA that guarantees 60% of oil and gas produced in Canada goes to the USA.
I am sure if he tries to renegiotate NAFTA, this 60% clause will be on the table. There is plenty of takers for Canada's resources besides the USA. Why do you think a pipeline is being built from Alberta to the Pacific coast ?
The Green Faucet article is pretty interesting.
There is a long "cause and effect" chain associated with corn ethanol.
It obviously drives up food prices when you convert food to fuel.
In Canada they even make ethanol with wheat.
By making corn more expensive, the basic food of many Mexicans, the ethanol advocates have also inadvertently increased illegal immigration into the US.
Expensive corn means expensive tortilla bread and has caused many poor Mexicans to go North to seek a better life.
This is another problem with dismantling NAFTA (like Obama wants to do). NAFTA currently provides jobs for many Mexicans. Changing it would put more Mexican folks out of work and aggravate the current illegal immigration problem in the USA.
I agree with you that we should get off of oil, but to convert to an oil-free society will take 30 yrs at least. Ethanol and hydrogen are not the solution as they both have a negative EROI (it takes more energy to produce them than is returned). The US has over 200 million cars, so we are stuck with a gasoline/diesel economy and with desperate measure such deep sea drilling, oil sands and oil shale. T. Boone Pickens has the right idea. Use solar and wind to generate electricity. The natural gas saved can be used for Gas-to-Liquids plants to make gasoline and diesel. No a complete solution, but a step in the right direction. Pickens is currently investing about 15 billion in wind farms in Texas.
I also agree with you that oil revenue is diverted to terror groups by some oil producing countries. (For example, 18 of 19 of the 9/11 suicide bombers were from Saudi Arabia).
The USA spends 1.2 trillion a year on oil (assuming $130/bl).
$900 billion of that amount is used for imported oil. That is a very scary number when you consider that the US GDP was only 13 trillion dollars in 2007.
There's nothing particularly wrong with biofuels per se. But there is a whole lot of wrong with the subsidies, import tariffs and consumption mandates that are distorting not only the energy market but agricultural markets as well.
It's the big food companies, such as Coca Cola, Gen. Mills, etc. which have lobbied and convinced people that ethanol is the reason for high corn prices. It may be partly true, but the gluttonous appetites of Americans for corn syryp soda, etc. is the reason also. Much of corn is used for corn syrup--we don't need soft drinks--there would be no shortage of corn if Americans didn't crave corn syrup, but corn was used mostly for corn meal and other corn foods.
Of course the conglomerate food companies are worried--but their higher costs are largely due to increasing fuel prices.
Are increasing costs of oil due to Ethanol?
No--they are largely due to rampant speculation by index and other funds driving up the spot price of oil
Unfortunately, nobody speaks for the farmer--check out some info from Midwest farmers and scientists.
Of course, they're not equal in astuteness to the New York Times, who "knows everything".
http:theindependent.com/new...
http:farmingforyou.org...
Just put in
theindependent.com and type in Ethanol on the search for the site--several articles come up
1. You are right about Obama being influenced by Illinois corn farmers who helped get him this far. He is beholden to them, yet corn ethanol produces less than 2 units of energy for every 1 unit it takes to produce it. Switchgrass produces a much higher rate, something along the lines of Brazilian sugar cane, which produces more than 8 units of energy for every 1 unit needed to produce it. Obama supports the tariff on Brazilian ethanol and supports billions of subsidies for Illinois corn ethanol. The Brazilian vote won't get him elected; the Illinois-Iowa-Kansas vote will help him in the Fall. So, he is a politician on the politically expedient but sensibly wrong side of an issue. John McCain has him here.
2. On Healthcare, I disagree with you. Others have it much better. We are subsidizing the rest of the world for drugs because pharmaceutical companies charge us much more than they do other countries for the same thing. There are more MRI machines in the Greater Atlanta area, e.g., than in all of Canada. The Japanese had a solution: a cheaper MRI machine that Toshiba made, and innovations like this make Japanese healthcare cheaper. Take a look at Reid's Frontline investigation on world health care systems. It is a convincing look at how five other industrial nations do it. Our Medicare and our Veterans Admin were templates for a couple of these "foreign" systems.
www.pbs.org/wgbh/pages.../
What others on this blog fail to factor into the current oil equation is we absolutely didn't learn anything from the 70's. Our wars alone have cost trillion(s) not to mention blood. Today we buy oil from our enemies around the world. I'd rather pay more for chicken if it meant my dollar stayed in the pocket of an American farmer. If I can't serve overseas, I'd gladly support our troops from home.