Corn ethanol was supposed to save the country from its oil dependency. Instead, it has increased the cost of a bushel of corn from $2 to $5, resulting in large price increases in pork and beef.
Now Congress has mandated that cellulosic fuel (rendered from plant products) be blended with gas for fuel: 250 million gallons in 2011.
Despite $1.5 billion in subsidies and a tax credit of $1.01 per gallon, nobody can produce it in volume. The companies that received the subsidies are now largely bankrupt. What’s worse, the EPA has fined the oil companies for failing to comply with a mandate to buy it, even though it doesn’t exist. This cost gets passed on to consumers as higher gas prices. In a final stroke of idiocy, Congress is granting even more subsidies.
So to summarize, Congress subsidized a product that doesn’t exist; mandated its purchase, though it still doesn’t exist; is punishing oil companies for not buying a product that doesn’t exist; and is now doubling down on the subsidies in the vain hope that some day it might exist! Meanwhile, we cannot tap most of our domestic oil reserves due to environmentalist extremists.
Hal R. Dixon