NCPA - National Center for Policy Analysis

Ethanol Subsidies should be Shucked

October 14, 2003

Once upon a time, the idea of making fuel from corn had promise. For one thing, corn, unlike oil, is renewable. For another, corn-based ethanol includes oxygen. A major source of smog in the 1970s was fuel that wasn't fully burned in the engine. Adding oxygen-laden ethanol to the fuel was a neat way to ensure that the fuel burned more cleanly, says Alan Murray, Washington Bureau Chief of CNBC.

But making ethanol turned out to be very expensive:

  • Even with a generous federal subsidy, which has cost taxpayers more than $10 billion over the years, the fuel remains uneconomical, particularly for states such as New York and California, which have to ship it in from the Farm Belt.
  • Making ethanol also has turned out to consume much energy -- some say more than it produces.
  • Moreover, by the mid-1980s, auto makers had learned how to make gasoline burn cleaner by adding car computers that monitor fuel-oxygen levels, and then control the mix of fuel and air as necessary.

"There is no point in pouring ethanol into the fuel mix anymore," says Erik Stork, who was director of Mobile Source Pollution for the Environmental Protection Agency during the 1970s. As for ethanol's effects on global warming, the General Accounting Office, the investigative arm of Congress, concluded it is no better, and may be worse, than conventional gasoline. Instead of the size of the ethanol mandate being doubled, as pending legislation would do, critics say it ought to be repealed.

Source: Alan Murray, "Battle Over Ethanol As Additive to Fuel Intoxicates Congress," Wall Street Journal, October 7, 2003.

For text (WSJ subscription required),,SB106547745887283400,00.html


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