AEI Op-Ed Slams Bush SOTU Ethanol Proposal - Bloomberg

[hatrack]

AEI?

EDIT

Ethanol subsidies are the worst kind of government program. Ethanol is a costly fuel source that takes so much energy to produce that it has little impact on our reliance on other sources of energy. Indeed, some estimates suggest that our energy consumption might go down if we banned ethanol altogether. Why the big subsidies? Ethanol is more popular in Midwestern states than ``American Idol'' because it drives up corn prices. This side of our energy policy is welfare for farmers and nothing else.

Domestic oil production might seem like a nice thing, but subsidizing it has little impact on the concerns mentioned above. A subsidy for production lowers costs and increases consumption. It is hard to imagine that higher oil consumption is what the global warming crowd has in mind. (emphasis added) :silly:

Subsidies for domestic production also buy little security. Even if the U.S. were to produce all the oil it consumes, it would still be vulnerable to oil-price fluctuations. A supply reduction in the Middle East would raise prices of domestic oil just as readily as it raises prices of imported oil.

Reducing our own demand from countries such as Iran has no effect, since that country can just sell oil to other customers. Who could possibly argue with this point? We have purchased no oil from Iran since 1991, but they were the world's fourth- largest net oil exporter in 2004.

EDIT

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_mcquillan&sid=azoIOWzaY1GM

[phantom power]

1. I feel a disturbance in the Force. The AEI is recommending...

a carbon tax?