Today's WSJ has an article highlighting what is inherently obvious: when you burn part of the food supply, the price of groceries will increase:
surcharge for ethanol in higher food prices. CBO estimates that from April 2007
to April 2008 "the increased use of ethanol accounted for about 10 percent to 15
percent of the rise in food prices." Ethanol raises food prices because millions
of acres of farmland and three billion bushels of corn were diverted to ethanol
from food production. Americans spend about $1.1 trillion a year on food, so in
2007 the ethanol subsidy cost families between $5.5 billion and $8.8 billion in
higher grocery bills.
Supply and demand, anyone?
Progressives who constantly gripe about regressive taxes are awfully silent regarding what equates to an $8.8 billion regressive food tax. Of course, I'm sure their response would be to increase food stamps.
In light of the all-too-predictable spike in grocery prices, the Obama administration nevertheless is seeking to double-down on this war on the poor policy of ethanol mandates:
mandate to increase the share of the corn-based fuel required in gasoline to 15%
And putting the icing on the cake of this expensive corn ethanol boondoggle is research that shows it actually releases more CO2 than fossil fuels over the long term:
burning fossil fuels. Ethanol produced in a "basic natural gas fired dry mill"
will over a 30-year horizon produce "a 5% increase in GHG emissions compared to
petroleum gasoline." When ethanol is produced with coal burning mills, the
process "significantly worsens the lifecycle GHG impact of ethanol" creating 34%
more greenhouse gases than gasoline does over 30 years.
Unfortunately, the joke is on consumers and taxpayers. As the article sums:
poor hitter but a bad fielder. It doesn't reduce CO2 but it does cost more.
Imagine how many subsidies the Beltway would throw at ethanol if the fuel
actually had any benefits.