Obama's Pandering Boondoggle - Ethanol

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It's one of the enormous embarassments of the American primary system that it's almost impossible to win the nomination of a major party without winning the Iowa Caucus - something that Barack Obama did. The problem is that what makes sense for Iowans doesn't always make sense to anyone else. The case in point is corn-based ethanol.

Obama supports ethanol, and specifically the kind that Iowa produces. Not only that, his campaign is run by lobbyists with close ties to the industry.

There's probably too much attention on the fact that corn based ethanol contributes to the rising price of food. It probably does, but any kind of agriculture used for fuel is going to have that effect since it diverts agricultural resources from food products. The larger problem is that of all the kinds of ethanol that can be produced this way, and that cause that problem, corn based ethanol is probably the worst. In comparison, Brazil's cane based stuff is way better - it's not only more efficient, it's also more green in terms of emissions. In many ways the only reason why corn ethanol is even produced is because the US traditionally makes way too much corn in the first place, at least partly because of huge subsidies to the industry and tariffs on their competitors - like Brazil's. John McCain supports lowering the tariff to let common sense in, Barack Obama doesn't.

And by the way, I think energy independence is a fucking stupid idea. As with all things, where there is a comparative advantage, there should be specialisation of production and trade, rather than doing all of it yourself. That's just a recipe for inefficiency and isolationism. I want all countries to have to depend on other countries for something, and energy is as good a thing as any. The problem is not interdependence, the problem is fluctuation and uncertainty of supply, leading to unstable commodity prices. The problem is also the control of a given commodity by a cartel. Fine. Then let those be the issue, rather than the straw man of "foreign-ness". The assertion that your dollars are funding the people who are trying to kill and terrorise you I find particularly jingoistic. You mean the Canadians? Who is the largest supplier of oil to the US? They hate you, to be sure, but I think you can take them. And just to make clear, energy independence and climate change are two divergent issues, that politicians conflate at their peril.

So. You find yourself subject to the unhappy control of a cartel. One that oversees a resource whose production is often subject to uncertainty and potential disruption. Pick a different commodity/resource. There's plenty of choices. Coal, Nuclear, Natural Gas, Wind, Solar - you name it, there are alternatives. And now that petroleum is so expensive due to increased demand from emerging economies it makes alternative sources more and more economically viable. Less so if you are subsidising one (ethanol) so much more than the others, since doing so just makes ethanol's competitors have to struggle all the more to become economical. And in the end it has to be made clear that of all the alternatives, ethanol, in any form (as opposed to the larger set of biofuels) is probably a dead end.

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This page contains a single entry by subtitles published on August 3, 2008 6:04 AM.

Why I am a Centrist was the previous entry in this blog.

Obama and McCain Surrogate and VP Sunday Morning Roundup is the next entry in this blog.

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