Hold on to your wallets; the Senate is debating the energy bill today. I actually just heard John Thune say that ethanol is a clean fuel that will lessen our dependence on foreign oil. Spare me. Ethanol is neither clean nor a silver bullet to make us self-sufficient in energy. Ethanol production is filthy, just as dirty as other manufacturing processes, particularly when you take into account the appalling effects of fertilizer runoff killing fish in the Gulf of Mexico when growing the corn for the ethanol. Why don’t the Senators from Louisiana open up a can of whup ass on this one?
Reducing dependence on foreign oil is a specious objective when you recognize that oil is traded in integrated world markets and we are not low-cost producers. So even if we reduce our oil consumption the marginal barrel of oil will still come from somewhere in the Middle East. That won’t change. Reducing our consumption would be likely to reduce oil prices (but only marginally, because China’s demand is the big price driver right now) and would be good from a conservation perspective, but it won’t change the fact that we import oil from places we don’t think we can trust.
Ethanol is nothing more than a rent-seeking wealth transfer from the distributed and disorganized drivers to the highly organized and lobby-happy large agriculture industry. Rent seeking is waste. In this case it’s waste falsely draped in the mantle of green energy and national security, but waste it is nonetheless.