Monday, May 9, 2011

Politics Makes Strange Bedfellows Indeed

No, that is not a picture of the cute balloon animal from my granddaughter's recent birthday party. It's an ethanol molecule. Ethanol is one of the most heavily-subsidized green weenie alternate fuels beloved by the federal government and farmers. In fact, in 2010, the bill for subsidizing ethanol (ethyl alcohol derived from corn) was $6 billion.

Like most alternatives for oil-drilling, natural gas drilling, and clean-coal development, ethanol is one of those "green" remedies that's as bad as or worse than the fuels that environmentalists hate so much. In fact, the only provable green parts of the ethanol boom are the greenbacks being used to support it and the massive algae blooms in the Gulf of Mexico resulting from byproduct runoff being floated down the Mississippi River.

Every head of corn used to make ethanol is one head less which could be used as food. What has been an abundant and inexpensive food source for the poor people Barack Obama claims to love so much is now becoming scarcer and therefore more expensive. That's called "the market" principle of supply and demand--something of which the socialists are entirely unaware. Farmers who are receiving the subsidies are not at all concerned that farmers who do not receive the subsidies are paying higher prices for corn-based animal feed. That also drives up food prices.

So who are the strange bedfellows? California Senator Dianne Feinstein (liberal Democrat) and Oklahoma Senator Tom Coburn (moderate/conservative Republican) have joined Tea Party activists attempting to end the $6 billion annual ethanol subsidies. This puts them on the side opposing the ethanol lobby, farm welfare pimps, major segments of the no-oil ecofreaks, and anti-tax bigwig Grover Norquist. Feinstein and Coburn issued a joint announcement in which they declared subsidies for ethanol and oil to be counterproductive. As for ethanol alone, they said: "Ethanol is the only industry that benefits from a triple crown of government intervention. Its use is mandated by law, it is protected by subsidies on domestic production and tariffs on foreign production, and companies are paid by the federal government to use it."

Speaking of the subsidies and tariffs on both ethanol and oil, they said "the subsidies are no longer affordable and the tariffs actually increase gasoline prices because it's cheaper to import oil than to import ethanol." That also runs counter to a recent statement by Barack Obama who praised Brazil for both its oil and ethanol production (he has actively squelched the former within the US). Said The One to the Brazilians: "You are eager to produce petroleum products, and we are eager to buy them." Speak for yourself, Mr. President. "We" want to see American drilling platforms in the Gulf that are twice the size and capability of the Brazilian platforms you are praising.

Oh what a tangled web we weave when first we practice government interference in the market. It's getting harder and harder to figure out who is on which side. Norquist, president of Americans for Tax Reform, says that Coburn is breaking his pledge to halt tax increases because ending the ethanol subsidies would amount to a tax increase for corn growers. Well, Grover, that's not only a debatable point, but it wouldn't be an increase for farmers who are growing corn for food. In fact, it would boost production and net income for them, thus resulting in increased revenue for the government (Laffer Curve, anyone?).

Feinstein is caught in another dilemma which Coburn doesn't face. California (not Iowa, not Illinois, not Kansas, not Nebraska) had long been the largest corn-producing state in the nation. But the cornfields of the Central California Valley largely produce dust these days as a result of enviro-freak protection of a useless little fish and an attendant government-created drought.

Feinstein must be living in a terrible world of self-conflict. She is opposing subsidies to an agricultural entity that her beloved EPA is killing off in California anyway. She is denying pork to an industry that used to bring immense revenue to California and to the United States at large. And speaking of pork, hog production in California is also way down because of a lack of water to slake their thirst and corn to feed them. I'm getting a headache just thinking of all those self-contradicting concepts.

Coburn did not take Norquist's claim lying down. He fired back with: "The ethanol subsidy is nothing more than corporate welfare not-so-cleverly disguised as a tax 'break' that, in the real world, has the impact of a tax increase because other taxes have to be raised to pay for it." The Tea Party subsidy opponents seem to feel that all the talk of taxes is valuable, but there is a much more basic issue involved. Said one writer on the Tea Party website: "Why should we as taxpayers pay to make our road fuel more corrosive and less energy dense? And making fuel out of food is retarded, even for politicians (emphasis added)."

You may be surprised to realize that corn, previously 100% food, is now 60% food and 40% fuel. It doesn't take a mathematical genius to figure out that this really means a substantial decrease in the availability of a cheap and abundant food source. Joining Feinstein and Coburn are Greenpeace (over the algae blooms) and the Grocery Manufacturers Association (over the food issue, obviously). 90 other large and influential organizations from every point on the political spectrum have formed a political coalition to fight the subsidies.

The one organization that isn't facing reality is, of course, the EPA. The EPA has now stepped into the unelected bureaucracy role of greenhouse gas regulator after the green weenies failed to enact "appropriate" legislation in Congress. But just how "green" is the EPA really? Says reporter Carolyn Lockhead, environmental writer for the San Francisco Chronicle (yes, that Chronicle): "Because fossil fuels are used both to grow corn and to refine it into ethanol, and because ethanol does not yield as much energy per gallon as gasoline, various studies have shown that ethanol does not save much energy overall, and may increase greenhouse gas emissions (emphasis added).


Notawonk said...

"...various studies have shown that ethanol does not save much energy overall, and may increase greenhouse gas emissions (emphasis added)."

there is rarely anything as delightful in politics as a liberal view getting smacked in the head by itself! (schadenfreude strikes again!)

what shmoes...

Unknown said...

Patti: And I get the additional schadenfreude for it coming from San Francisco. LOL

rlaWTX said...

real life is real hard for some folks...

Unknown said...

rlaWTX: And dealing with real life is particularly hard for politicians who haven't lived a real life in years.

AndrewPrice said...

Yeah, this is strange issue because of the desire of so many to keep the subsidy alive and then the strange position of Norquist to oppose this as a tax cut.

I talked about this issue and the fight between Norquist and Coburn here: Conservatives Split On Taxes. Norquist is wrong.

Unknown said...

Andrew: Norquist can't have it both ways, and he's wrong on this one. The point of this article was to draw attention to the fact that people of all stripes are beginning to catch on, not just conservatives.

Tehachapi Tom said...

Ethanol is really a poor choice as a fuel. It has 34 percent less energy than gasoline for one. It has a higher vaporization pressure for two(results in hard to start in cold weather). It requires six gallons of petroleum to produce ten gallons of ethanol which generates less energy than the six gallons of petroleum fuel.
Non of the facts support the use of ethanol as a motor fuel.
Why is it that poor results are embraced with such passion?
Does or government really believe that by doing the same thing over and over will result in a different result because they want it to?
Pseudo science seems to be the only science our government people believe in. It must be a lawyer thing.

Unknown said...

Tehachapi Tom: I think that's the reason liberal Feinstein finally had to join Coburn reluctantly. Unlike Boxer, Feinstein can occasionally tell which way the wind blows. She reads the Chronicle and unlike Boxer, she has an election coming up in 2012.

StanH said...

Lawhawk this is a fine example, once they enact a program in Washington it almost never gets eliminated, this is why Barrycare had to be enacted right then, and there. This is a habit we must break, dumba$$ ethanol subsidies would be a great place to start.

Unknown said...

Stan: So true. Government agencies designed to address a particular problem take on an independent life of their own, and government programs become perpetual drains on the American people. It's time to bring out the torches, stakes, and gravediggers shovels.

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