Wednesday, April 20, 2005

Energy: penny wise, pound foolish

One of the things people don't always look at is real costs involved in what look like "green" alternatives.

I've pointed out studies showing that, for example, recycling paper does more damage to the environment than using fresh trees, grown for the purpose.

James Glassman makes a similar point about energy.

The worst idea from the group is to boost the already massive subsidies for ethanol, a fuel made from corn. We have lots of corn in America, goes the thinking, so we can stuff it in our gas tanks and save on oil. In fact, the ethanol project is simply a pork-barrel jamboree for a few Midwest states, plus producers like Archer Daniels Midland, which, despite a serious price-fixing scandal, remains politically well connected. Legislation proposed in the House calls for expanding use of ethanol from 3 billion gallons in 2004 to 8 billion in 2012. One result of this extreme measure, according to the Department of Energy, would be to increase the price of gasoline. Meanwhile, less than 1 percent of imported oil would be displaced, and overall fuel consumption would actually rise. A study by David Pimentel of Cornell in 2003 found that -- due to tractor fuel, irrigation pumps and other inputs -- ethanol uses 29 percent more energy than it creates. [emphasis added] Also, of course, grain prices will rise as cropland is diverted to growing corn for fuel. Ethanol already gets a federal tax exemption, worth 53 cents per gallon (for the pure stuff), but it hasn't caught on. If ethanol made economic sense as a fuel, it wouldn't need help from the government.

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