The ethanol boondoggle is one of the most costly of American government subsidies. It’s a case where clueless and naive greens were taken to the cleaners by greedy farm interests. And it looks like the ag lobby’s powers of enchantment over environmentalists are as strong as ever.
Faced with a crippling drought which has devastated this year’s corn crop,state governors and poultry producers petitioned the EPA to waive the Renewable Fuel Standard,which mandates that a certain percentage of the U.S. gasoline supply be ethanol-based. The EPA has turned down the call:
Corn prices peaked at $8.43¾ a bushel in August after extreme dryness and temperatures above 38°C (100°F) gripped grain states such as Illinois and Indiana. Record prices have pressured farm operations dependent on corn for animal feed.
The government is allowing up to 13.2bn gallons of corn-based ethanol to meet the renewable fuel mandate this year. The ethanol industry will consume 42 per cent of the latest US corn crop,or 4.5bn bushels,the US Department of Agriculture estimates.
Read more at The American Interest. By Walter Russell Mead.
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