Topic: Silly Government
Is anybody paying attention to the Ethanol debacle? Simple physics coupled with some basic economics precludes this ridiculous new interference in the market by government.
It takes 1.5 gallons of ethanol (76,000 BTUs) to equal 1 gallon of gasoline (115,000 BTUs).
Current use of gas in the US is about 140 billion gallons. Government wants 20% of the fuel supply to be ethanol. This comes to 28 billion gallons of gas, or 42 billion gallons of ethanol since it takes 1.5 gallons of ethanol to equal 1 gallon of gas. Good farm land produces about 150 bushels of corn per acre with each bushel producing about 2.5 gallons of ethanol. So, at 150 bushels x 2.5 gallons per bushel yields 375 gallons per acre. Divide the needed 42 billion gallons by 375 gallons per acre and we have 112 million acres. About 330 million acres of the US is arable and corn, soybeans, wheat, and cotton use up about 225 million acres. Corn occupies about 78 million acres and parks, golf courses and other public places occupy much of the remainder not to mention fruits, and other vegetables. Where is the extra 96 million acres going to come from? Don’t forget that by 2017 mandated ethanol usage will require 120 million acres. Adding insult to very real injury, the government subsidy for ethanol production is 51 cents per gallon and costs the taxpayers just shy of 23 billion per year. Now you know why so many are rushing to the trough for this subsidy. Then there is the very real probability that the production of ethanol uses more energy than it makes resulting in an energy deficit.
It behooves us to ask the same old questions that have always been asked: who benefits and who loses. Companies like Archer Daniels Midland, one of the companies who will be paid to blend the ethanol with gas come to mind. And they donated about 7.7 million to politicians in ethanol states. The losers – the taxpayers as always.