Gasbags for Ethanol

"There is no ethanol 'market,'" Jay Hancock writes in today's Baltimore Sun. "The ethanol business is driven by government planners, not freely acting buyers and sellers." Those subsidies, he adds, aren't likely to end anytime soon:

It's impossible to find a politician who opposes ethanol welfare. Republican presidential candidate John McCain, who once opposed increased ethanol production, thinks it's a great idea. Democratic candidate Hillary Rodham Clinton, another previous opponent, sees ethanol as a key part of her $50 billion "moon shot" program to cut U.S. addiction to oil from unstable countries.

President Bush signed the 2005 energy bill that requires the United States to consume 7.5 billion gallons of renewable fuel by 2012. Then he raised the bid, calling in his 2007 State of the Union speech to reduce the projected use of gasoline by 20 percent in the next decade, mainly with ethanol. (Ethanol makes up less than 5 percent of gas use now.)

And Congress looks like it will comply, requiring once undreamed-of ethanol consumption even as it maintains the industry's $2 billion annual tax-credit subsidy.

So who cares if existing plants and those under construction will produce 12 billion gallons of ethanol—60 percent more than we'll need even five years from now, under current law?…Who cares that making ethanol may consume as much energy (including fossil fuels) as it produces? Who cares if ethanol competition is dissuading oil companies from building new refineries—a key reason gas costs more than $3 a gallon?

More ethanol fans: Rudy Giuliani, Mitt Romney, John Edwards, Barack Obama…pretty much all the frontrunners, with the possible exception of Fred Thompson. According to the DNC, Thompson "consistently voted against ethanol subsidies" while he was in the Senate. Naturally, the DNC thinks this is a bad thing, but as far as I'm concerned it's the first really positive fact I've heard about the man. Of course, he could always pull a McCain on the issue once he hits the campaign trail.

(The DNC also says that Thompson was one of just 13 senators who voted to establish a school voucher system, to be "paid for by eliminating certain subsidies for ethanol, oil, gas and sugar." I'm against federally funded vouchers, but set that aside—if Thompson is willing to take on the sugar lobby, that's another point in his favor. A point outweighed by his die-hard support for the Iraq war, but a point nonetheless.)