Corn is great food, but lousy energy. Energy derived from corn–ethanol–cannot compete in the marketplace with more efficient sources of energy, like petroleum, unless its producers get money from the government to artificially lower the price of their product. This is what is known as “green energy.” It amounts to having a bonfire with your money. Well, no, not exactly a bonfire, since, while there is undeniably a net inefficiency and thus a destruction of wealth, your money doesn’t go up in smoke. Rather, your tax dollars are transferred to a combination of Midwestern farmers and politically connected ethanol plant developers. Like other government subsidy programs, it’s great if you get to cash the checks, but bad if you are a taxpayer or an energy buyer.
At The Corner, Kevin Williamson makes some excellent points:
A little perspective:
BP’s oil-spill cleanup bill, so far: $3.2 billion
Money BP is setting aside for the total bill: $20 billion
Annual cost of U.S. ethanol subsidies: $5 billion
Ethanol subsidies going to BP this year: $600 million
Conclusions: Every four years, U.S. taxpayers are subsidizing the energy firms by an amount equal to the maximum that BP expects to spend on the cleanup. BP specifically will collect an equivalent amount every 33 years. This year’s BP ethanol subsidy by itself will offset about 20 percent of what BP has spent on the cleanup so far.
And that’s just one subsidy program.
Tell me again why this “green economy” stuff is not a scam.
The banks paid back their TARP money, and the nation remains scandalized by that bailout. What are the chances the energy industry is going to pay back a penny of the billions we’re pouring on them through green energy subsidies?
TARP was just a temporary aberration, whereas the “green economy” is here to say–which is to say that the Democrats intend the subsidies to be permanent.