Wednesday, June 11, 2008

We Have a Tariff on Ethanol? Really?

Good sweet fancy Moses.

We want to reduce our dependence on foreign oil.

So we tax imported ethanol?

2 comments:

Anonymous said...

It gets worse.

The ethanol produced in the U.S. is almost completely corn based, hence produced exclusively in the Midwest. Unfortunately, you can't send ethonol through a pipeline (it's too corrosive).

The only option is to truck it or train it. Trains hate the stuff, too dangerous if derailment (alcohol fires are nearly invisible and difficult to put out). There aren't enough trucks in the U.S. to move it where it's needed in large quantities- east and west coasts. Even if there were enough trucks, it would take more energy to move it than would be saved by displaced oil consumption.

So not only has a protected market been created for an inferior product (corn derived ethanol v. sugar derived), but ethanol from Brazil could be efficiently transported to the east and west coast by barge.

So we have an inferior product, in a protected market, that can't be efficiently moved to where the demand (albeit artificially created) is present.

Thank "W" and Pelosi for coming up with this solution to oil dependence in the "Energy Independence and Security Act of 2007."

http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.00006:

br said...

My favorite line is:
"...the domestic ethanol industry argues it will leave the country dependent on yet another foreign energy source."

No sh!t they argue that. But, the argument is essentially that diversity = risk. Hilarious.

Now I truly understand where the idea that we need to "reduce our dependence on foreign oil" came from... the corporate welfare recipients.