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WHEN NATIVE AMERICANS introduced the Pilgrims to corn, they intended it as something to eat. Now, 400 years later, we're stuffing it in our gas tanks and paying twice for the privilege.
Once, of course, is at the pump, as we use gasoline sweetened with 10 percent corn-based ethanol. But the other time is through the $6 billion with which American taxpayers subsidize producers of the additive. That may seem like a drop in the bucket overall, but it's a benchmark issue: If Republicans are really committed to changing Washington and to free-market principles, ethanol subsidies will be allowed to expire.
We're learning more about the downside of ethanol as time goes on. Its use was mandated by the 2005 and 2007 energy bills, and if the Obama administration has its way, those mandates will increase from 13 billion gallons this year to 36 billion gallons by 2022. Currently, gasoline must be 10 percent ethanol; the EPA wants to push that to 15 percent.
But while stuffing corn in our gas tanks may usurp the use of those nasty fossil fuels, it isn't ideal. It isn't even environmentally sound. Ethanol mandates drive up the cost of corn, reduce the acreage used for other crops, increase costs to animal producers, and drive up food prices. Converting corn to ethanol requires a vast amount of water: Cornell University professor David Pimental puts that tab at about 8,000 gallons of H2O per gallon of ethanol. Thus, already stressed aquifers go dry. Finally, corn requires a high level of fertilization, which is why some environmentalists blame the dead zones in the Gulf of Mexico on increased acreage devoted to corn for ethanol.
Right now, there is a 45 cents-per-gallon tax credit for blending ethanol with gasoline. This, along with other subsidies, costs U.S. taxpayers $6 billion a year. There's also a 35-cents-per-gallon tariff on imported ethanol, a trade barrier that is causing friction with Brazil, which would like to ship sugar-cane-based ethanol to the U.S. Why aren't the free traders in Congress choking over that one?
All of these tax-fed measures are due to expire Dec. 31. All Congress has to do is nothing, and the black side of Uncle Sam's ledger will gain $6 billion. But ethanol producers are already lobbying for extensions. They claim that 160,000 jobs will be lost if the subsidies don't continue.
A study by Iowa State University puts the number at more like 300. It's time for the GOP to prove it can rise above standard back-scratching politics and do the right thing: End the ethanol subsidies.
