The Corn Ethanol Ripoff

Walter Williams describes why the Corn Ethanol industry in the USA is the biggest ripoff going.

Ethanol is 20 to 30 percent less efficient than gasoline, making it more expensive per highway mile. It takes 450 pounds of corn to produce the ethanol to fill one SUV tank. That’s enough corn to feed one person for a year. Plus, it takes more than one gallon of fossil fuel — oil and natural gas — to produce one gallon of ethanol. After all, corn must be grown, fertilized, harvested and trucked to ethanol producers — all of which are fuel-using activities. And, it takes 1,700 gallons of water to produce one gallon of ethanol. On top of all this, if our total annual corn output were put to ethanol production, it would reduce gasoline consumption by 10 or 12 percent.

Ethanol is so costly that it wouldn’t make it in a free market. That’s why Congress has enacted major ethanol subsidies, about $1.05 to $1.38 a gallon, which is no less than a tax on consumers. In fact, there’s a double tax — one in the form of ethanol subsidies and another in the form of handouts to corn farmers to the tune of $9.5 billion in 2005 alone.

What Williams doesn’t mention in this extract is the effect of corn ethanol on food prices. The price of corn has doubled since the ethanol mandate began, which has increased the price of eggs by 60% in the last year, meat by 50%, tripled the price of soybeans, and doubled the price of wheat. Corn ethanol is almost single-handedly responsible for the drastic increase in food prices over the past year.

How you like them apples?

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  1. Pingback: Corn at $6 a bushel « Beagle Scout

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