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June 25, 2006

Comments

fred

You are talking about ethanol from grain fermentation, where the most favorable calculations give a yield of 1.5 energy equivalents for what is put in. Ethanol from sugar cane, as is most extensively used in Brazil gives about 8 units (gasoline equivalents, or whatever). So, obtaining ethanol from grain fermentation will not have any real impact on energy policy.

Most of the carbohydrates in plants are in the form of cellulose, which is not fermentable because the yeast cannot break it down. While there are experimental plans using biotechnology to cheaply produce enzymes to break cellulose down to usable components for fermentation, there is no current commercially viable process using this method. Tax breaks and subsidies just (as you know) shift the costs elsewhere. If we would magically shift tomorrow to a 100% ethanol-based fuel economy, the greater than $200 billion in federal taxes that goes to road maintainance, and equivalent taxes at the state level, would have to be raised somewhere.

Peter G. Klein

Jeff, the question is complicated for libertarians, even stipulating that subsidies are harmful, because ethanol subsidies generally take the form of tax credits rather than transfer payments. "Elminating the subsidy" means increasing taxes on ethanol production to, you know, "level the playing field." The ethanol problem can't be satisfactorily addressed, in my view, independent of a general assessment of the efficiency and morality of targeted tax cuts.

Macneil

But what about Brazilian ethanol? We should drop all tariffs (I think it's around $0.50 per gallon) and see if it works. Brazilian ethanol is not corn based, so the environmental impact may be lessened.

garrett field

I agree with you. But ethanol is scarce or rare in this world.

ffxiv gil

around $0.50 per gallon) and see if it works. Brazilian ethanol is not corn based, so the environmental impact may be lessened.

ffxiv gil

I agree with you. But ethanol is scarce or rare in this world.

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