Ethanol subsidy 'worse than you can imagine'

For the last generation, ethanol has been America's fuel of the future. But there has never been more hype about it than there is today. Green-energy analysts like Amory Lovins, environmental groups like the Natural Resources Defense Council, neoconservatives like James Woolsey, and farm groups like the American Coalition for Ethanol are all touting the biofuel.

Making ethanol, they claim, will help America achieve the elusive goal of "energy security" while helping farmers, reducing oil imports, and stimulating the American economy. But the ethanol boosters are ignoring some unpleasant facts: Ethanol won't significantly reduce our oil imports; adding more ethanol to our gas tanks adds further complexity to our motor-fuel supply chain, which will lead to further price hikes at the pump; and, most important (and most astonishing), it may take more energy to produce a gallon of ethanol than it actually contains.

The greens, hawks, and farmers helped convince the Senate to add an ethanol provision to the energy bill—now awaiting action by a House-Senate conference committee—that would require refiners to more than double their use of ethanol to 8 billion gallons per year by 2012. The provision is the latest installment of the ethanol subsidy, a handout that has cost American taxpayers billions of dollars during the last three decades, with little to show for it. It also shovels yet more federal cash on the single most subsidized crop in America, corn. Between 1995 and 2003, federal corn subsidies totaled $37.3 billion. That's more than twice the amount spent on wheat subsidies, three times the amount spent on soybeans, and 70 times the amount spent on tobacco.