XPost: ba.politics, dc.media, soc.penpals   
   XPost: alt.burningman   
   From: demper@salon.com   
      
   The defender of the environment now admits ethanol was a   
   mistake. Will Congress heed his advice and end the corn   
   industry's $7 billion subsidy when it expires this month?   
      
   Last week, Al Gore finally admitted the obvious. The former vice   
   president (and winner of the Nobel Peace Prize) who promoted   
   ethanol in his Oscar-winning film, “An Inconvenient Truth,” said   
   that corn ethanol was a “mistake.” He went further, saying that   
   he supported ethanol production because the first presidential   
   primary is in Iowa, which produces more ethanol than any other   
   state: “I had a certain fondness for the farmers in the state of   
   Iowa because I was about to run for president," he said. Gore   
   also said that the “massive subsidies” given to ethanol are not   
   “good policy.”   
      
   Gore’s comments are particularly timely given that the ethanol   
   lobby is, once again, trying to extract more subsidies from   
   taxpayers’ wallets. And they are in a hurry to do so because a   
   45-cents-per-gallon ethanol tax credit expires on December 31.   
   That means they need help from the lame-duck Congress.   
      
   In mid-November, the ethanol industry’s main lobby groups,   
   including the Renewable Fuels Association, Growth Energy, and   
   the American Coalition for Ethanol, sent a letter to   
   Congressional leaders urging them to “pass legislation during   
   the lame duck session extending critical ethanol tax incentives   
   that will expire at the end of this year.”   
      
   The letter was sent just one day after Gregory Meyer of the   
   Financial Times reported that the U.S. ethanol industry is using   
   those very same tax incentives to maximize profits by   
   exporting–yes, exporting–record amounts of ethanol. Meyer found   
   that during the first nine months of 2010, U.S. ethanol   
   producers exported 251 million gallons of the corn-derived fuel,   
   more than double the volume from the year-earlier period. Among   
   the countries getting American ethanol: Canada, the Netherlands,   
   Saudi Arabia and the United Arab Emirates.   
      
   "Politicians are loathe to oppose the ethanol scam, particularly   
   if they are running for president."   
      
   Meyer makes clear that some of the companies who are shipping   
   ethanol overseas are blending it into gasoline before they   
   export it, thereby allowing them to claim the federal subsidy.   
   Thus, large quantities of the fuel that, at least in theory, is   
   supposed to be reducing America’s need for foreign oil, is   
   instead going overseas.   
      
   For three decades, the ethanol industry has been claiming that   
   their hydrophilic, corrosive, low-heat-content fuel is cutting   
   America’s need for foreign oil. Indeed, the ethanol lobbyists   
   cited the foreign oil bogeyman in their Tuesday letter to   
   Congressional leaders, saying “The volumes of ethanol produced   
   domestically have been uniquely successful in reducing our   
   dependence on foreign, imported oil.”   
      
   That bogus claim has also provided a key justification for the   
   60-cents-per-gallon tariff the U.S. imposes on foreign ethanol,   
   a tariff designed specifically to prevent cheaper Brazilian   
   ethanol from coming to America. That tariff was justified by   
   (what else?) that the domestic ethanol industry cuts oil imports   
   and therefore must be protected. In 2006, Barack Obama, then a   
   US Senator from Illinois, along with four other farm-state   
   senators, sent a letter to President George W. Bush asking him   
   to ignore calls to reduce tariffs on Brazilian sugarcane-based   
   ethanol. Lowering the tariff, Obama and his fellow senators   
   said, was unacceptable. “Our focus must be on building energy   
   security through domestically produced renewable fuels.”   
      
   Thus, while the U.S. prevents cheaper foreign ethanol from   
   coming here, taxpayers are giving fat subsidies (about $7   
   billion per year) to domestic corn ethanol producers who are   
   then using some of that money to ship more and more of their   
   product overseas. And in doing so, the U.S. ethanol sector is   
   consuming nearly 40 percent of all the corn grown in the US.   
      
   The ethanol industry has mapped out a strategy to assure that   
   the fat subsidies keep flowing. Matt Hartwig, a spokesman for   
   the Renewable Fuels Association, recently said that the ethanol   
   lobby hopes to tack an extension of the tax credits onto other   
   legislation. Hatwig told Andrew Restuccia of the Iowa   
   Independent that “One opportunity will be if/when they move Bush   
   tax cut legislation. That would be a natural place to add tax   
   extenders. We will look for any other vehicle that will get to   
   the president’s desk.”   
      
   Given the ethanol industry’s long history of fleecing American   
   taxpayers, don’t bet against that eventuality. And if you need   
   one more fact to drive your ethanol-induced rage to the boiling   
   point, consider this fact: Between 1999 and 2009, U.S. ethanol   
   production increased sevenfold, to more than 700,000 barrels per   
   day. And yet, over that same time span, US oil imports increased   
   by more than 800,000 barrels per day.   
      
   Given that ethanol industry can’t point to any reduction in oil   
   imports, what else do they have? Well, like every other subsidy-   
   dependent industry, they are claiming that they create jobs. In   
   their letter to Congress, the ethanol boosters are claiming the   
   three-decade-old ethanol subsidy program should be extended   
   because it has “supported the creation of hundreds of thousands”   
   of “green jobs.”   
      
   Okay, but how much do those jobs cost? According to an analysis   
   done last year by the Environmental Working Group, each of those   
   “green” jobs created by the ethanol scammers cost taxpayers   
   between $195,000 and $446,000 per year. Earlier this month,   
   Advanced Economic Solutions, an Omaha consultancy run by the   
   former chief economist for ConAgra Foods, analyzed how many jobs   
   would be added by extending the ethanol tax credit. Their   
   conclusion: 353 additional ethanol manufacturing jobs would be   
   created, at “an annual cost of $19.68 million per job.”   
      
   The hard realities of the ethanol boondoggle are obvious. Among   
   those realities: politicians are loathe to oppose the ethanol   
   scam, particularly if they are running for president, because   
   the first presidential primary is in Iowa. (Remember, Barack   
   Obama won the Iowa primary.) Second, ethanol hasn’t, and won’t   
   result in meaningful reductions in oil imports. And finally, the   
   ethanol industry hasn’t created a significant number of jobs at   
   anything close to a reasonable price.   
      
   Given all of that, there’s only one more question to be   
   answered: when will Al Gore, who has finally spoken the truth   
   about ethanol, retract the foolishness in his movie “An   
   Inconvenient Truth”? Recall that at the end of his hit   
   documentary, Gore admonishes viewers to “Reduce our dependence   
   on foreign oil, help farmers grow alcohol fuels.”   
      
   Perhaps we should be thankful that Gore has finally seen the   
   light on ethanol and dared to state the obvious: corn alcohol-   
   based fuel is a bad idea. But Gore and other leaders of the   
   Green/Left need to do more, and they need to do it now, so that   
   the madness of the ethanol subsidies ends once and for all on   
   December 31.   
      
   Robert Bryce is a senior fellow at the Manhattan Institute. His   
      
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