Biofuels are no cure-all for energy needs

When discussing economic policies it is important to not let rhetoric overpower reality. That happened in a recent, much-reprinted New York Times article that argued “endless fields of corn in the Midwest can be distilled into endless gallons of ethanol … that could end any worldwide oil shortage … and free the United States from dependence on foreign energy.”

As petroleum becomes scarcer and we seek effective ways to limit pollution, biofuels are likely to play an increasingly important role in our economy. If we implement prudent policies, increases in biofuel use can be economically efficient and make our society better off. Such policies would include incentives to reduce energy use and to develop energy saving technology. They would not mandate arbitrary levels of any specific technology including ethanol or diesel fuel derived from soy or other vegetable oils.

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