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The fallout from our ethanol blunder

May 04, 2008|By JAMES H. WARNER

It is a human failing to be susceptible to poor judgment. It is a sign of maturity to recognize when our judgment has been bad and to correct it when the evidence presents itself. Congress apparently lacks this maturity.

Congress mandated the addition of ethanol to gasoline and provided large subsidies to encourage this. This was supposed to reduce carbon emissions and reduce dependence on foreign oil. It has not only failed in its primary objectives, but is contributing to the threat of massive starvation around the world. Do I exaggerate?

Corn is the primary source of ethanol in the United States. Demand for corn has driven up the price. This has resulted in substitution, which is driving up the prices of other commodities.

Overall, grain and soybean prices have gone up 180 percent in the last two years. Prices are now so high that marginal lands are being cleared in order to grow crops. The forest or grassland that must be cleared absorbs far more carbon dioxide than the cropland that would appear in its place.

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Further, carbon dioxide is produced during the production and transportation of the ethanol. Finally, there is some evidence that the net energy in a gallon of ethanol is less than the energy that produced it.

Given that ethanol increases carbon dioxide emissions and gasoline now sells at $3.70 a gallon, it seems clear that the use of ethanol as fuel accomplishes neither of the objectives set for it.

But, you may ask, what is the harm? Good question. First, as I write, millions world wide face are experiencing hunger, and face the possibility of starvation, because the cost of subsistence has risen beyond their means.

It is estimated that as many as 1 billion people subsist on as little as $1 a day. Most of these are at risk of undernourishment and some of these risk starvation. There is unrest, and occasional food riots in countries as widely separated as Haiti, Yemen, Peru, Ivory Coast, Cameroon, Egypt and India. Several governments have placed restrictions on the export of staples in order to assure that there is a sufficient supply for their own population.

This is happening at a time when the world's stock of basic food stocks is under an ominous threat. A strain of black wheat stem rust, first found in Uganda in 1999, has traveled faster than expected, to Western Iran.

By next year it could be in Pakistan and India. It is able to defeat the rust resistant genes in almost all varieties of wheat. It will be several years before a new variety of resistant wheat can be grown in sufficient quantity to replenish the reserves that are currently threatened. If this happens after corn reserves have been used for ethanol, the number of hungry and starving people will be much larger than it is at present.

A second harm, but one which may be of equal importance, is the harm done by intensive cultivation. Think of the law of diminishing returns. In a free market, farmers would use chemicals to reach the optimum level of production.

The use of more chemicals, beyond this point, would cost more than it would produce, so they stop here. However, agricultural subsidies, whatever the method, almost always cover the variable cost to the farmer, that is, it will pay for the extra chemicals to reach maximum production.

For a slight increase in output, there is a much greater input of chemicals. The excess chemicals are washed away and a large quantity reaches the sea. Some biologists fear that in the near future these chemicals will increase the dead zone in the Gulf of Mexico in which little, if any, life can be found.

The irony is that we are sitting on an ocean of oil. If Congress, instead of burning food for motorfuel, would allow the exploitation of our own natural resources, the price of gasoline could be brought down to $1.50 per gallon.

This would strengthen the dollar, strengthen the U.S. economy and would bring down the price of food worldwide. A refusal to act, on the other hand, could trigger angry motorists to bring on another tsunami of public opinion such as the one that killed the immigration reform bill last year. For members of Congress, this is a point to consider.

James H. Warner of Rohrersville is a retired attorney and former domestic policy adviser to President Ronald Reagan.

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