Corn-Based Ethanol a Case Study in Law of Unintended Consequences

E-85 NozzleCorn prices have more than doubled in the past two years, contributing to sharp rises in the price of virtually everything in the American economy. Obvious products like corn flakes and meat aren’t the only commodities affected. Soda, beer, motor vehicle fuel, medicines and even car parts rely on corn-based substances in their production.

Ethanol-based fuel gets fewer miles per gallon than petroleum based gasoline, and some argue that ethanol, though touted as a “green” fuel, actually produces more greenhouse gas emissions than conventional fuel.

In June, US Senator and candidate for president, John McCain said “Support for corn-based ethanol has been a case study in the law of unintended consequences.” 

The national Republican Party revised it’s platform last week during the national convention calling for a reversal of the energy bill signed by president Bush that mandates a five-fold increase in ethanol production and provides additional government subsidy. The new platform plank says the US government should end ethanol mandates and let the free market work. 

McCain says he didn’t push for the platform change, but supports it. He pointed out that ethanol mandates have led to “distorted food markets through crop land competition,” and are “depriving America of better and cheaper fuels.”

For his part, presidential candidate Barack Obama says he “strongly supports ethanol subsidies.”

President Bush, in defending the policy suggested that new technology might come along that will allow economical production of ethanol from other biomass, like wood chips or switchgrass. He’s counting on the development of currently non-existent technology within the next nine years to meet the demands of the energy bill he signed in December and federal dollars are being invested in that research. Presently, not a single commercial US refinery is producing ethanol from anything but corn.

Failing the development of the theoretical new technology within a decade will leave US energy law in the precarious position of mandating something that is not physically possible. There is not enough corn farmed to meet the demands of the energy bill. As the forces of reality inch closer to currently unattainable ethanol mandates in the coming years, the price of virtually everything is likely to rise even more sharply than the preceding two years. Supply simply cannot meet the artificial demand imposed by government.

Minnesota governor Tim Pawlenty has been leading the charge for increased ethanol mandates. During his tenure as chairman of the National Governor’s Association, he advocated increased ethanol usage nationally and in 2005, he signed a law doubling Minnesota’s ethanol mandate from 10% to 20% by 2013. “Only people on the far margins of the political spectrum oppose ethanol,” he said.

Minnesota’s increased ethanol mandate will not take effect unless a waiver can be obtained from the US Environmental Protection Agency.

17 Responses to Corn-Based Ethanol a Case Study in Law of Unintended Consequences

  1. Neil F. September 8, 2008 at 9:48 pm #

    I am a Minnesotan, and a conservative. My Governor is wrong on energy. I don’t know if he really believes in ethanol, but the farmers who get subsidies for their corn sure do love it. Lets face it, outside of the Twin Cities, and a few other urban areas, Minnesota is one big farm. And the farmers, who are mostly Democrats, would not support Pawlenty if he opposed the mandates and subsidies for corn based ethanol (like he really should). So I understand why he supports it, he wants to be re-elected.

    I am very disappointed in the Republicans for supporting this kind of nonsense. Gee, lets pass a law that depends on technology that doesn’t even exist yet! What a smashing idea chaps! While we’re at it, lets mandate warp drive engines, plasma shields, holodecks, and transporters too!

  2. Neil F. September 8, 2008 at 10:08 pm #

    Sorry I got a little carried away there. I should have said “President Bush, and in the past Republicans”, instead of Republicans. I am in favor of reversing the policy on ethanol. I support the Prez on most things, but what he said suggesting that future technologies may help us refine other forms of ethanol just set me off. What a stupid thing to say. How do we know if those technologies will ever be viable? Let alone defending a policy hoping we can do that one day! Give me a beak. Why don’t we stock up on lead ingots and hope that we can turn lead into gold? It makes about as much sense to me.

  3. Rob N. Hood September 9, 2008 at 8:41 am #

    While many Americans struggle to fill their gas tanks, big U.S. oil companies are making so much money that they literally don’t know what to do with it.

    Instead of reinvesting more of their newfound wealth to increase supplies or develop emerging technologies that might one day reduce energy costs, they are giving much of the loot to shareholders already enjoying outsized gains.

    In a capital-intensive business, giving cash back to shareholders is often the equivalent of throwing in the towel. It’s saying “we can’t do anything with this money to improve our business.”

    And it certainly doesn’t address the oil crunch that consumers pay for every day at the pump.

    Is that what oil giants pay executives exorbitant salaries to do? Especially in a sector where better long-term vision and reserve development 10 years ago might have helped avoid the current mess?

    I don’t think so. But that’s what’s happening.

  4. Rob N. Hood September 9, 2008 at 2:49 pm #

    The “Moral Majority” Republicans and the “supply-side” neocons always represented two of the worst and most vile impulses in the American character — mass, willful ignorance and total, shameless greed. In one wing of the ruling-party mansion they housed preachers who transformed the religion of “turn the other cheek” and “go, give away all your possessions to the poor” into a “Christianity” that celebrated shock-and-awe bombing and assault-rifle ownership and decried the progressive income tax as unfair to the propertied class. In the other wing they housed “conservatives” who turned the party of “limited” government into a giant snooping apparatus, one that “borrowed” (spent) trillions against the future earnings of ordinary taxpayers and sacrificed thousands of lives to snatch a few Middle Eastern oil wells for companies that were rich as hell to begin with.

  5. Dan McGrath September 10, 2008 at 12:19 am #

    You’re barking up the wrong tree.

  6. Rob N. Hood September 10, 2008 at 9:38 am #

    Am I? Woof!

  7. Rob N. Hood September 10, 2008 at 9:39 am #

    Speaking of trees (you brought them up, I didn’t):

    VISALIA, Calif. – Federal researchers are warning that warming temperatures could soon cause California’s giant sequoia trees to die off more quickly unless forest managers plan with an eye toward climate change and the impact of a longer, harsher wildfire season.

    Hot, dry weather over the last two decades already has contributed to the deaths of an unusual number of old-growth pine and fir trees growing in Yosemite and Sequoia National Parks, according to recent research from the U.S. Geological Survey.

    In the next decade, climate change also could start interfering with the giant sequoias’ ability to sprout new seedlings, said Nathan Stephenson, one of several scientists speaking Thursday at a government agency symposium on how global warming could affect the Sierra Nevada.

  8. Neil F. September 12, 2008 at 6:52 am #

    Does Rob N. Hood have an opinion on ethanol? I think Rob has this site confused with the Daily Kos, cause I can go there to get anti-capitalist, and evil big oil screed. Hmm….

  9. Neil F. September 12, 2008 at 4:47 pm #

    Rob N, Do you know what junk science is? A tell is when they say could, might, or may. I don’t believe everything I read, even if it agrees with my beliefs. I like to confirm things. I was a true believer in global warming 20 years ago. But through research and follow up, I discovered that the global warming theory is full of holes.
    As far as the study you mentioned in your post, this is the summary at the end of this. http://www.werc.usgs.gov/sngc/forest_demography.htm

    What are the implications for global warming?

    Declines in tree death rate with elevation are independent of changes in stand structure and composition and appear to be related to biotic (insects and pathogens) and unknown (most likely biotic) factors. Death rate declines may be driven by (1) reduced insect and pathogen activity with declining temperature at higher elevations, or (2) decreased length/severity of summer drought stress at higher elevations, hence lower susceptibility of trees to biotic causes of death. If these findings hold in other forest types and regions, they suggest a potential tree death rate increase in the face of global warming.

    It seems to me that they are making too many assumptions and guesses to be science. But if you want to believe that this is proof of global warming, you go right ahead. But don’t pee on my leg and tell me its raining.

  10. KuhnKat September 12, 2008 at 11:35 pm #

    Rob N. Hood,

    you do not appear overly concerned that the gubmint is spending billions on researching a fraud and trying to implement fascist policies based on this fraud.

    You a part of this conspiracy??

    Most of the glaciers in California are GROWING!! I am 56 and grew up in the San Joaquin valley. Southern California is a DESERT!!! The southern valley is naturally very arid. Your quoted research simply confirmed what history has shown us about the long term California climate.

    Now, do you support the ethanol subsidies? Especially since ethanol is WORSE for the environment, even by your standards, than using oil??

  11. Sick N. Tired September 13, 2008 at 2:33 am #

    Ethanol is one of the biggest scams of all, and it’s crippling our economy to make a few big ag companies richer. I will never vote McCain, even if he picked Palin – He’s turned her into one of “them” in a matter of weeks. I’ll never vote for McPlenty, either. He’s changed his tune a tiny bit on global warming, but he’s still a fraud.

    I’m sick of being scammed, and I refuse to be a part of the fleecing of America!

  12. Rob N. Hood September 13, 2008 at 10:05 am #

    So you guys just want an echo chamber here is that it? I think the jury is still out on global warming, to claim either way is presumptuous. I believe that Ethonol is a scam. I am yet to be convinced that global warming is a money making scam.

  13. Neil F. September 13, 2008 at 8:34 pm #

    Rob N: No we don’t want an echo chamber. But when you echo the environmentalist, and anti-oil talking points, that’s where you sound like you are coming from. In the interest of common ground, I’m glad to hear that you believe ethanol is a scam. We agree 100% there. So there is hope for you.
    I became very skeptical of global warming when I first heard someone say that the debate is over. I then started to look into it and found that the entire anthropogenic global warming theory is based on computer models. I then started to look into the accuracy of computer modeling of climate systems. And guess what?.. You can make a computer model do whatever you want it to do. Also, it is impossible to accurately model the climate for the simple fact that nobody knows what all the factors are.
    Now I’d like to offer you some evidence that one of the greatest proponents for global warming is making buckets of money off of it.
    http://climateerinvest.blogspot.com/2008/06/al-gore-generation-investment.html There is more information out there, you just have to look for it. I’d also like you to read the following comments from the Weather Channel’s founder John Coleman. http://www.kusi.com/weather/colemanscorner/19842304.html
    And if you are still not convinced, I’d like you to look here http://www.friendsofscience.org/index.php?ide=3 to see what some scientists in Canada have to say about global warming.
    If you have anything you would like me to look at, to try to convince me of your point of view, please post them and I will be happy to look at them.

  14. Rob N. Hood September 18, 2008 at 3:48 pm #

    When you say global-warming propronents are making buskets of money- I think you have drunk some kool-aid yourself. Where is your proof of these great riches you speak of….? However, it is very clear that the oil industry that is making barrels, not buckets, of money… and chumps out of us. I am not a scientist, nor do I spend lots of time trying to find data to support my views. And you even admit, a study or reaserch can be “made” to say whatever you want it to. It all depends on who funds it, or who the researcher actually works for. So here we are in a sad state of affairs where it is difficult to believe anything. Now comes the tin-hat part: I do beleive that over the past 20 years there has been a concerted effort to crank out more and more “research” and studies to purposefully cloud many issues- why? …. so the elite stay rich and we stay ignorant and at each others throats. It’s working out pretty damn good for “them” I’d say. Not so much for me, or even you probably. What can we do about it? I really don’t know. I don’t really trust anyone anymore. And I think that’s a bad thing for America, and the world.

  15. Matt October 30, 2008 at 3:09 pm #

    Rob N. Hood: Maybe you should check the statistics on how much taxes oil copanies pay for all the profits they receive. They pay billions not to mention the hundreds of thousands of employees they hire. Besides share holders determine CEO pay not the gov’t, nor should they. Someone a long time ago took a huge risk to start an oil company and they should be compensated for their hard work. Their are companies such as Wal-Mart, McDonalds etc…. that have double digit profit margins every year but nobody ever goes after the evil empire of McDonalds? [actually, they do - editor] The fact is we are a class society and people will always envy the rich for what they have achieved and want to punish them because it is not fair. I know because I used to be a Liberal… I mean Democrat. Then I became informed. They have a saying when you are young and dumb you vote Democrat and when you age and become educated you vote Republican.

  16. KI M DIONSON ORION January 27, 2009 at 7:22 am #

    I WANT TO FINISH MY STUDY CAN YOU HELP ME.IT’S FINANCIAL PROBLEM.PLZZZZZZZZZZ

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  1. Breakfast Links | Points and Figures - May 26, 2011

    [...] to bear the yoke of Romneycare (a total fail in Mass), then T-Paw needs to pull the weight of his ethanol mandate in Minnesota. He did call for an end to subsidies [...]

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