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The Ethanol Industry: An Insider's Take

Corn-based ethanol is not the answer. It is one of the least efficient sources and results in higher consumer prices for food and other goods. In fact, sugar, hardy grasses, and fast growing trees have higher ethanol yields. Corn is popular because it allows Congress to subsidize more farmers.

Relative to consumer choices driving the price of oil, it isn't just the consumption of gasoline in the family sedan or SUV. Plastics and other materials require petroleum as well. Each bottle of water that you consume has a negative impact. In addition, all of the food that you consume, the clothes you wear and the medicines that you take have to be delivered to you via some means.

Can Americans stand to reduce gasoline consumption? Yes, but ethanol is not the answer neither is just focusing on automobiles.

On a side note, we had a potential ethanol producer come into our town - in the middle of the corn belt - looking to add more capacity. They indicated that it cost more to produce a gallon of ethanol than a gallon of gasoline and in fact suggested that the addition of ethanol in fuel blends - as mandated by our state government - was partially to blame for higher short-term (summer) gasoline prices. If this is the case, then the oversupply of ethanol and the higher prices are the result of government subsidies. So not only are we paying state and federal taxes on each gallon that are used to subsidize ethanol production but also serve to drive up the price per gallon.