Ethanol’s a Big Scam, and Bush Has Fallen for It

In his State of the Union address, George W. Bush called for an intense effort to develop more efficient alternative fuel sources.

“We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips and stalks or switch grass,” the president said. “Our goal is to make this new kind of ethanol practical and competitive within six years.”

Bush should have known better. In a capital city that is full of shameless political scams, ethanol is perhaps the most egregious. There has probably never been a specific topic around which so much disinformation is spread. Ethanol lowers our reliance on fossil fuels! Ethanol helps clean the environment! Ethanol will save the family farm!

Such sound bites work wonders when it comes to raising money. And the amount involved is mind-boggling. The federal government subsidizes ethanol producers with a tax credit of 51 cents per gallon of fuel ethanol; those subsidies will total about $1.4 billion this year.

Bloomberg