American Elephants

Big Government Intrudes in Your Life, Part IV. by The Elephant's Child
April 5, 2010, 10:33 pm
Filed under: Economy, Energy, Law, Statism | Tags: , , ,

In Part II, we discussed the Obama administration’s EPA’s new rules forcing automakers to increase their vehicles’ fuel economy by 40% in five years. This will cost Americans a bundle — raising the price of a car from $1,000 to $5,000 more, kill jobs in the auto industry and incidentally kill a lot of people on the highways by forcing car makers to make lighter, more vulnerable cars. That happened on April 1.

The next day, the same EPA favorably reviewed an ethanol fuel mandate that would force cars to get up to 5 percent poorer fuel efficiency. Fifty two ethanol producers known collectively as “Growth Energy” (Big Corn) want the EPA to boost existing requirements that gasoline contain 10 percent ethanol to 15 percent.  That change would mean billions more in government subsidies for companies in the business of growing corn and converting it into ethanol.

For the rest of us, it means significantly higher gasoline prices, higher food prices (you have no idea how many things contain corn), and gasoline that contains less energy and won’t go as far. Ethanol is an inefficient fuel.  It reduces gas mileage by 5.3 percent.  Repair bills will climb because engines are not designed to handle 15 percent ethanol.  Vehicle warranties specifically exclude damage from the use of unapproved fuels, so the costs will fall on drivers.  How much damage, I don’t know.

The policy is distorting the market for food.  “Big Corn” wants the government subsidies, because without the government mandate, who would buy ethanol?  There is no justification  for this intervention. This is not the time for useless “green” games.  The EPA should reject “Big Corn’s” rent seeking, and Congress  should repeal all ethanol subsidies.

Actually, Congress should repeal the EPA.  What a useless organization!

Another Black Spot on Al Gore’s Record by The Elephant's Child

Al Gore

Al Gore has a lot to answer for. He didn’t really understand the science that he rushed to popularize with fear-mongering about rising sea levels and a dying earth. Bureaucrats, with little understanding of the science, rushed to legislate to prevent “global catastrophe”.

When the buzz among the cognoscenti reaches a certain level, the pressure to do something becomes difficult to resist. And buzz often comes in forms of preconceived notions and oft-repeated slogans such as “big oil” or “addiction to oil”,”renewable energy”and above all “biofuels“.

A liberal Congress quickly fell victim to the common liberal delusion, as David Horowitz once said, that good intentions, earnestly expressed, are good policy. “Big oil” is obviously evil (gas prices are too high and they are making too much money). Forgotten in the haste to do something is the realization that nothing moves in this country that is not powered by petroleum. So of course they provided vast subsidies for ethanol, made for the most part in this country from corn.

But there are consequences. The U.N. World Food Program is preparing to ration food aid for the world’s hungriest poor. The richest countries are burning food in their automobile gas tanks. The mandates for biofuels by the wealthiest countries have doubled and tripled world food prices in less than three years. WFP costs are rising by millions of dollars each week, but donations aren’t keeping pace. The Program is trying to feed 70 million people, but can’t afford to meet their commitments.

Three years ago, the price of corn was $1.86 a bushel, now it is over $5.00. You have probably noticed rising prices in your grocery. Corn is not only in most cereals, but as cornstarch, as a sweetener, a thickener is found on most shelves. At the meat counter corn is in most animal feed. In paste form, it is in the drywall.

Pakistan says it will reimpose food rationing. China’s food inflation rate is 18.2%. In Yemen prices of staples have nearly doubled and at least a dozen people have been killed in food riots. The poor in much of the Third World spend over 60% of their income on food. It is expected that American farmers will plant 30% more corn this year than last, directed to the higher prices they receive for subsidized biofuel.

But ethanol delivers less energy per gallon than gasoline. Studies suggest that it pollutes more, and can only be used in engines specially designed for ethanol. Demand for better food is growing as millions of Indians and Chinese enter the middle class.

The EU is committed to provide 10% of its transportation fuel from biofuels, grown both in Europe and in Indonesia and Thailand; and they are unwilling to consider that burning food crops in our gas tanks has anything to do with high food prices.

The most extreme environmentalists hope to eliminate — from a good portion of the human life on this planet — to all of it. They have told us so often enough. So there is a little more to their refusal to allow drilling in proven oil fields in Alaska and in coastal waters than many people realize.

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