Colin at Celcias is bicycling across the nation and is currently pushing through Nebraska. He’s awed by the amount of corn grown there, but then does the math on the huge subsidies for corn ethanol.
Corn ethanol subsidies totaled $7 billion in 2006 for 4.9 billion gallons of ethanol. That’s about $1.50/gallon This breaks down to:
1. 51¢ per gallon federal blenders credit for $2.5 billion
2. $0.9 billion in corn subsidies for ethanol corn
3. $3.6 billion extra paid at the pumpIt only costs 38¢ more per gallon to produce ethanol so why the enormous subsidy?
Then there’s the huge amounts of water needed to grow the corn, as well as fertilizer and pesticide. Plus the price of corn is steadily rising, which boosts food costs in general because corn or corn byproducts are in most everything. It’s also being grown in Third World countries specifically to make ethanol, which means less people there get to use the corn for food. And that’s hardly for good.
Corn ethanol is problematic at best. There are better ways to create ethanol.