May 19, 2007
Are the wheels coming off corn ethanol?
Posted by
Michael O'Hare
The Wall Street Journal yesterday had a Potomac Watch column by Kimberley Strassel, "Ethanol's Bitter Taste," behind their paywall, detailing the political hostility rising corn prices are stimulating even in corn states (because those are also chicken, beef, hog, etc. states).
At an agriculture conference in Indianapolis last fall, Indiana Gov. Mitch Daniels, Agriculture Secretary Mike Johanns and EPA Administrator Stephen Johnson spoke, delivering their usual fare about how ethanol was the greatest thing since sliced corn bread. They expected warm applause; in the past the entire ag community united around helping their brother corn farmers make a buck. But now that ethanol is literally taking food from their beasts' mouths, much of that community has grown less friendly. According to one attendee, Messrs. Daniels, Johanns and Johnson were later slammed with snippy ethanol questions from angry livestock owners, much to their dazed surprise. Word is that even the presidential candidates—who usually can say no wrong about ethanol while touring the Midwest—are having to be more selective about where they make their remarks. Things are even hotter in Washington, where lobbying groups are firming up their positions against corn ethanol. The hugely influential National Cattlemen's Beef Association has gone so far as to outline a series of public demands, including an end to any government tax credits (subsidies) for ethanol and an axe to the import tariff on foreign ethanol. Put another way, the cattlemen are so angry that they are demanding free markets and free trade—a first. Maybe ethanol really is a miracle fuel.
And this morning, Kevin Drum picked up on a study I did with some colleagues, mentioned here a month ago, that highlights the importance of distinguishing various ways of making ethanol, with an appropriately skeptical tone. He used the word boondoggle, and he used the word sucks, although neither as blanket condemnations.
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