Ethanol Backlash
November 12, 2007; Page A16
Like water seeping out of the giant High Plains Ogallala aquifer, support for corn ethanol seems to be ebbing in Congress. As political news goes, this is of the miracle variety, but apparently the market distortions caused by ethanol mandates are finally having an impact.
"We're in a strong position," says Senator John Cornyn, the Texas Republican who is blocking a conference on the energy bill because the House version contains billions in new oil taxes to be spent on ethanol subsidies. Meanwhile, in the House, there's opposition to the Senate's mandate to increase ethanol production by 30 billion gallons annually by 2022.
Let's review: the House energy bill taxes oil to subsidize ethanol, drawing Senate opposition, while the Senate bill forces U.S. consumers to buy more ethanol, drawing House opposition. Seems to us that the two chambers could simply agree that expanding on the already enormous subsidies for ethanol is a costly mistake and go home to enjoy Thanksgiving dinner, but we don't pretend to fully understand the ways of Congress.
What we do understand is that opposition to corn-based ethanol from environmentalists has Speaker Nancy Pelosi seeking a rewrite of the Senate's mandate. As the speaker attempts to fashion a stripped-down bill that can move in both houses, the House's tax-and-subsidy scheme for ethanol also doesn't appear to be part of the package. And with good reason.
Last month, the National Academy of Sciences reported on the impact of ethanol production on water supplies. A University of Iowa professor chaired the report committee, so Big Corn might have hoped for a home-court advantage. But NAS reported that, "in some areas of the country, water resources are already significantly stressed . . . Increased biofuels production will likely add pressure to the water management challenges the nation already faces as biofuels drive changing agricultural practices, increased corn production, and growth in the number of biorefineries." When ethanol is criticized by scientists at Iowa's two largest state universities, you have to wonder who is for it.
Meanwhile, investors are figuring out that these government policies are turning water into an increasingly scarce resource on which money can be made. Last week brought news that legendary oilman T. Boone Pickens has purchased 400,000 acres of water rights in the Texas panhandle. This will allow him to dip a straw into the Ogallala aquifer, portions of which "show water table declines of over 100 feet since about the 1940s," according to the NAS report.
When oil barons decide there's money in drilling for scarce water in the American West, it's time for Congress to stop subsidizing an inefficient and thirsty energy source that soaks up more of that water. Ethanol has prospered on taxpayer subsidies fed by political panic over oil prices and old-fashioned Congressional log-rolling. It's about time that some in Congress are finally stopping to inspect ethanol's many, and growing, costs.”
November 12, 2007; Page A16
Like water seeping out of the giant High Plains Ogallala aquifer, support for corn ethanol seems to be ebbing in Congress. As political news goes, this is of the miracle variety, but apparently the market distortions caused by ethanol mandates are finally having an impact.
"We're in a strong position," says Senator John Cornyn, the Texas Republican who is blocking a conference on the energy bill because the House version contains billions in new oil taxes to be spent on ethanol subsidies. Meanwhile, in the House, there's opposition to the Senate's mandate to increase ethanol production by 30 billion gallons annually by 2022.
Let's review: the House energy bill taxes oil to subsidize ethanol, drawing Senate opposition, while the Senate bill forces U.S. consumers to buy more ethanol, drawing House opposition. Seems to us that the two chambers could simply agree that expanding on the already enormous subsidies for ethanol is a costly mistake and go home to enjoy Thanksgiving dinner, but we don't pretend to fully understand the ways of Congress.
What we do understand is that opposition to corn-based ethanol from environmentalists has Speaker Nancy Pelosi seeking a rewrite of the Senate's mandate. As the speaker attempts to fashion a stripped-down bill that can move in both houses, the House's tax-and-subsidy scheme for ethanol also doesn't appear to be part of the package. And with good reason.
Last month, the National Academy of Sciences reported on the impact of ethanol production on water supplies. A University of Iowa professor chaired the report committee, so Big Corn might have hoped for a home-court advantage. But NAS reported that, "in some areas of the country, water resources are already significantly stressed . . . Increased biofuels production will likely add pressure to the water management challenges the nation already faces as biofuels drive changing agricultural practices, increased corn production, and growth in the number of biorefineries." When ethanol is criticized by scientists at Iowa's two largest state universities, you have to wonder who is for it.
Meanwhile, investors are figuring out that these government policies are turning water into an increasingly scarce resource on which money can be made. Last week brought news that legendary oilman T. Boone Pickens has purchased 400,000 acres of water rights in the Texas panhandle. This will allow him to dip a straw into the Ogallala aquifer, portions of which "show water table declines of over 100 feet since about the 1940s," according to the NAS report.
When oil barons decide there's money in drilling for scarce water in the American West, it's time for Congress to stop subsidizing an inefficient and thirsty energy source that soaks up more of that water. Ethanol has prospered on taxpayer subsidies fed by political panic over oil prices and old-fashioned Congressional log-rolling. It's about time that some in Congress are finally stopping to inspect ethanol's many, and growing, costs.”
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