Ethanol Production Mandates Starving Families & The World

I hope this article doesn't come as a surprise to anyone as just about every conversation about energy independence is about fossil fuel substitutes.

Right from the beginning, everyone knew, and I mean everyone knew, that Ethanol would cost more to produce and it would not help the energy crisis and that it would not be competitive without large subsides. Enter the Ethanol lobby into Washington to change the minds of the politicians, especially the progressive Democrats that are in bed with the environmentalists that hate fossil fuel.

Given the information here, and that is available to everyone else that matters in Washington, why don't they take action to stop this insanity? Knowing the damage that Ethanol production mandates are doing to this country, but to the rest of the world as well, why are we still pushing forward with taking 40% of our corn crop and turning it into fuel?

What in the world is going on here?

Irrational Infatuation with Biofuels
Source: Richard Rahn, "Irrational Infatuation with Biofuels," Washington Times, July 23, 2012.

Much of the United States is in the midst of a major drought, which is a significant party to rapidly increasing food prices nationwide. And while government cannot be blamed for the weather, it is nonetheless the policies politicians created that are making higher food prices more painful than they have to be, says Richard W. Rahn, a senior fellow at the Cato Institute.

This is essentially true because of the role of ethanol mandates in distorting the United States' market for crops.

•The federal government requires petroleum producers to include a set amount of ethanol in their gasoline cocktail.
•Given that ethanol would almost certainly not be used by these producers in the absence of such regulations, this policy is responsible for an artificially high demand for the crops used to create ethanol, and especially corn.
•Currently, about 40 percent of the U.S. corn crop is used in the production of ethanol, and this increased demand has resulted in higher prices for the crop.
•Because corn is a crucial input in the production of other foods as well (such as livestock), prices for those goods have also increased.
•Further, as a result of higher corn prices, many farmers are growing more corn and fewer other crops, such as wheat, which, in turn, has caused the prices of those other crops to rise as well.

Crucially, because the United States is the world's leading agro-producer and grows 40 percent of the global corn supply, higher prices domestically translate into higher prices everywhere. This means that higher food prices will also hit low-income countries around the world, whose citizens are least able to bear them.

Furthermore, all of this distortion due to ethanol mandates is for naught. While the argument for mandating ethanol in motor fuel was to help make the United States energy-independent and reduce carbon dioxide emissions, this is far from reality.

•Recent studies show that the total carbon dioxide emissions from growing, harvesting, processing and burning corn as ethanol are much greater than those from oil and gas production and use.
•Additionally, ethanol reduces gas mileage in cars because it is less energy-dense than gasoline and causes more wear and tear on engines.
•Finally, without subsidies, ethanol is more costly than oil and gas.