E85 Boondoggle of the Day: No Surrender for Federal Subsidies!

Robert Farago
by Robert Farago

"Agriculture Secretary Edward T. Schafer is preparing to walk into a buzzsaw of criticism over American biofuels policy when he meets with world leaders to discuss the global food crisis next week." Ouch! Clearly, The New York Times is through pulling is punches on America's corn-fed bio-fuel bonanza. The majority of their article "Food Report Criticizes Biofuel Policies" is dedicated to a report criticizing biofuel policies (strangely enough), But before the knife is twisted ("The Agriculture Department’s own longtime chief economist, Keith Collins, who retired in January, said that ethanol was the 'foot on the accelerator' of corn demand), Secretary Schafer wants his constituents (corn growers) to know he's got their back. By his department's reckoning, biofuel production accounts for "only" two to three percent of the increase in global food prices, while reducing crude oil consumption by a million (a million!) barrels a day."We think that policy-wise in the United States of America — and certainly in the rest of the world — as we see the price of oil and petroleum escalate dramatically beyond anyone’s imagination, that one of the ways to deal with that is to produce biofuels which are renewables, better for the environment and help lower that cost." So E85 reduces gas use (although it increases gas use) and helps the environment (although it hurts the environment). Let the price supports begin! Oh wait…

Robert Farago
Robert Farago

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  • 97escort 97escort on May 30, 2008

    Re: At what gas price is E85 actually cost effective? I bought my 99 Flex-Fuel Ranger in 2005, but quit using E85 since it was over priced compared to E10. Now with local gas at $3.80 and E85 at $2.80, I'm planning on switching to E85 again. My Ranger gets 80 percent of the mileage with E85 that it get with E10. 80 percent of $3.80 equals $3.04. Since I can buy E85 for $2.80, I will save about 24 cents per gallon. I may go back to mixing E85 with E10 for my 97 Escort too. I shoot for E20. Works just fine.

  • Benders Benders on May 31, 2008

    You do realize that the sudden anger over using food crops for fuel is the result of a PR campaign, right? http://grassley.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=ee2bfce2-f5dc-7670-0f23-38fc3f9755d8&Month=5&Year=2008 (The actual proposal for the campaign is a little down the page.) And do you realize that US farmers will EXPORT about 2.5 billion bushels of corn this year. A whopping 18% increase over last year? Global food shortages are much more a result of drought in European and Australian wheat producing regions and a rice shortage.

  • Anonymous Anonymous on May 31, 2008

    OK with me if the Senator from Iowa wants to produce ethanol. Just quit forcing the rest of the coutry to heavily subsidize with tax dollars. Corn Production and Ethanol "That struck me as remarkable, so I looked into it a bit further. According to the IMF's 2008 World Economic Outlook, ethanol will actually consume 31% of the entire U.S. corn crop in 2008 (see Appendix 1.2, fn. 16). If the U.S. meets its mandate to quintuple ethanol production by 2022, then by 2015 ethanol will consumer roughly 50% of the U.S. corn crop. "The U.S. is far and away the biggest corn producer in the world. According to the Department of Agriculture, the U.S. will produce 332 million metric tons of corn in 2008. If 31% of the U.S. corn crop is being used for ethanol, that means ethanol will consume roughly 103 million metric tons of corn. World corn production in 2008 is estimated to be roughly 772 million metric tons. Thus, U.S. ethanol is consuming roughly 13% of the corn produced in the world. Ponder that for a second: U.S. ethanol is consuming roughly 13% of the corn produced in the world. How much would food prices go down if there was a 13% increase in the supply of corn used for non-ethanol purposes? I don't know. But I imagine it wouldn't be an insignificant price reduction -- especially for poor countries." http://economicsofcontempt.blogspot.com/2008/05/corn-production-and-ethanol.html

  • Joeaverage Joeaverage on Jun 02, 2008

    And so are the ethanol cars really optimized for burning ethanol? Educate me a little - cars burning ethanol could do better with higher compression? If we are going to use ethanol - let's make the most of what we put into the gas tank, otherwise we are back to driving thirsty, wasteful vehicles when there is ethanol in the tank.