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Opinion
Jul. 01, 2008
Copyright © Las Vegas Review-Journal

EDITORIAL: Fixing a boondoggle

Pursuing common sense on ethanol

On Monday, more than 50 House Republicans asked the Environmental Protection Agency to reduce required ethanol production this year, saying a law requiring a fixed amount of corn liquor be blended into gasoline sold at the pump will boost already high corn prices in the wake of recent Midwestern floods.

"The Renewable Fuel Standard (RFS) is a significant factor in the increased cost of commodities, which is causing severe economic harm for low-income Americans and livestock producers," the 51 lawmakers, led by Rep. Bob Goodlatte of Virginia, wrote in a letter to EPA Administrator Stephen Johnson.

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    • "The (Bush) administration can immediately impact the supply of corn that will be used for food and feed and lessen the severe economic harm facing millions of Americans," Rep. Goodlatte and the others wrote.

    Back in April, Texas Gov. Rick Perry already asked the EPA to cut by half a requirement in last year's energy law to produce 9 billion gallons of ethanol to blend into gasoline this year. That'll use up 30 percent to 35 percent of the nation's corn crop, the Agriculture Department says.

    Corn prices have surged more than 80 percent in the past year due to sharp increases in global demand to feed people and livestock while diverting that much corn into motor fuel -- a fuel so expensive it would never be used without the government mandate.

    Recent flooding in the Midwest and drought in the South will make things only worse, reducing this year's corn crop by 9 percent, the Agriculture Department said.

    A loophole in the 2005 energy law allows individual states to seek a reduction in the amount of corn being diverted into highway fuels if they can show it will harm the economy or the environment.

    The obvious "disconnect" here is that the 51 sensible folks thus calling for a reduction in the amount of American-grown corn being distilled into alcohol and mixed into motor fuel -- as opposed to being used to feed hungry people and livestock -- are what we like to call "members of Congress," while the absurd edict they're asking EPA chief Johnson to relax was originally imposed on his agency by, um ... Congress.

    So, why don't the 51 just recruit an additional 211 of their colleagues to join them in repealing the whole darned boondoggle?

    As Jerry Taylor and Peter Van Doren of the Cato Institute reported in the Chicago Sun-Times 17 months ago, "A review of the literature by Australian academic Robert Niven found that, when evaporative emissions are taken into account, E10 (fuel that's 10 percent ethanol and 90 percent gasoline, the standard mix) increases emissions of total hydrocarbons, nonmethane organic compounds, and air toxics compared to conventional gasoline. The result is greater concentrations of photochemical smog and toxic compounds."

    In other words, ethanol increases air pollution.

    The answer is to repeal the ethanol boondoggle, completely. And then take away from this debacle an important lesson: The next time someone proposes Congress use its power to meddle in any other aspect of the self-regulating free market, the members should re-read Col. Crockett's account of his encounter with Horatio Bunce and then ask aloud, "I have here Article I, Section 8 of the Constitution. This section is only a few hundred words. Can anyone show me where it gives us the power to decide how much of anything should be manufactured, and what it should cost, and then give the people orders as to how much of it they're required to consume?"

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    snackler wrote on July 01, 2008 08:11 PM: The price of oil, gasoline, corn natural gas, and other commodities have gone to the moon. Why? The price of all these commodities is set on trading exchanges where the ultimate buyers for these goods compete with investors and speculators. Many in the oil industry claim that we do not have a shortage of oil, but a shortage of oil contracts. Get the "investors" and speculators out of the mix and prices will accurately reflect the supply and demand. A good example is coal. Coal has seen high demand for years. Coal is sold the old fashioned way, buyer and seller make the deal. There is no trading in coal futures. We have seen oil and corn skyrocket this year, and natural gas has gone up 64%. Coal? Only up 7%. You will never see again see cheap prices on anything that is traded on the futures markets. It's time to get the blood sucking middleman out of the deal and get back to a basic tenent of capitalism, the buyer and seller get togther to set the price.


    Jack wrote on July 01, 2008 04:09 PM: John F, I have to disagree with the no bid contracts for Exxon and Shell.

    These would not be the same contracts that 41 companies from around the world are bidding on now would they?

    With the refineries and oil production I have to agree. Later this year the Texas refinery is going to be coming back online (probably just in time for the election) from the fire and explosion (when was it?) last year or 2 years ago, while the rest of them are only running at about 85% capacity, down from 95 to 98%.

    Could this decrease in capacity be because they are all 50 to 75 years old? Did they learn they could not run these old refineries at that high of a capacity with the Texas fire?

    So could it be time to maybe build some new refineries and then close the older ones?

    In the mean time, India has one of the largest refineries in the world coming online next year, while WE sit on OUR hands.


    John F wrote on July 01, 2008 02:23 PM: Mr. Hyde,

    Have you noticed that the radical Muslims are pretty happy with us right now? Al Qaeda has built itself back up to the strength it was on September 10, 2001 in the mountains between Afghanistan and Pakistan while we fritter away our lives and treasures to make it safe for Exxon and Shell to sign no-bid contracts in Iraq.

    Osama bin Laden never in his life could have dreamed of being given as good a gift as Gorege W. Bush has been. Any other American President wouldn't have rested until bin Laden was dead.


    Mr. Galt,

    There is enough oil on the market; noboy is running out. You are very much correct about the weak dollar being a major source of the rise in cost of oil.

    George Bush did say we needed to drill more and build more refineries. He's wrong. Our oil refineries aren't running to capacity now and, as I mentioned before, nobody is running out of gas. OPEC has us over a barrel because we have no alternatives to oil. Jimmy Carter warned us 30 years ago that if we didn't kick the oil habit we'd be facing the very situation we are now. But we all know what a bad President he was; not half the man that W is.


    Travis wrote on July 01, 2008 11:56 AM: "corptacracies"

    Great word!!! Fascism at its finest.


    Bub Bear wrote on July 01, 2008 11:31 AM: 2001; US produced 9.50 billion bushels of corn;
    2002: 8.96 billion bushels
    2005: 11.16 billion bushels
    2006; 10.53 billion bushels.

    How many acres planted in corn?
    2005; 75,117 acres
    2006 70,648
    2007 86,542
    a loss of 10% of acres would still leave 77,888 acres (a historic high outside of 2007).
    corn

    The R-J editor argues that "a fuel so expensive that it would never be used without the government mandate." And oil?! We don't pay the true price of oil! Heck, it is reported in government documents that in 2006 it cost the US taxpayer $46 billion to protect the production and transfer of oil! Yes, ethanol subsidy is a terrible idea but it was the Republicans that made it law after all!

    helena of troy and horrible hyde deny the great ills brought from 6 years of R control...heck, one of them think that Archer Daniels Midland and
    Conagra are democratic machines!!! Google these corptacracies and the world republican and look who is running these things,,,,big friends of GWBush and all people republican!

    You have to know who you are hating!


    John Galt wrote on July 01, 2008 10:37 AM: Auslander wrote on July 01, 2008 08:20 AM: Ethanol is not the answer, but total deregulation isn't either. The unregulated energy market is one reason for runaway gas prices; it is no coincidence that while the rest of us are bearing the burden Exxon Mobil posts record-breaking profits.
    ===============
    No, it's not. Exxon Mobil makes record-breaking profits because of record-breaking sales. The dollar is weak and supply is tight worldwide. Get more oil on the market and things would be different.

    Didn't Bush say years ago we need more oil and more refineries?


    timinator wrote on July 01, 2008 08:35 AM: And if stories like sockdolager had been taught in our government schools for the last 70 years, maybe the country wouldn't be in the mess it is.

    Sockdolager is available here:
    http://pages.prodigy.net/krtq73aa/sock.htm

    That any Republicans still have a clue is minor miracle.


    Auslander wrote on July 01, 2008 08:20 AM: Ethanol is not the answer, but total deregulation isn't either. The unregulated energy market is one reason for runaway gas prices; it is no coincidence that while the rest of us are bearing the burden Exxon Mobil posts record-breaking profits.


    Lawrence Hyde wrote on July 01, 2008 07:33 AM: In just a few months this country will have reed, pelosi, and obama running it. More than likely both houses of congress will be predominantly democrat. Then we will see taxes go sky high, and the muslims will love us so much they will have free rein to do what ever they want to us. We will think the Bush years were great.


    HELENWEILS wrote on July 01, 2008 07:03 AM: Why don't they just eliminate it completely? Try Archer Daniels Midland and
    Conagra for starters. This is typical
    Democratic governance.


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