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Tag Archives: World Bank ethanol study

Sarah Steelman is right–about one issue anyway.

04 Friday Jul 2008

Posted by Michael Bersin in Uncategorized

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ethanol, missouri, Sarah Steelman, Show Me Institute, World Bank ethanol study

It’s an odd feeling to be cheering Sarah Steelman for doing the right thing. (Though I still have a wary eye out for an ulterior motive in her announcement that she has changed her mind about the ethanol mandate in Missouri.) She now opposes it.

Missouri requires that 10 percent of all gasoline be ethanol, and Steelman chose “a busy Springfield street side for her announcement that ‘within 100 days of being elected Governor, I will do everything in my power to repeal the ethanol mandate in Missouri.'”

She opposes the mandate because “it has produced higher food prices and higher costs for farmers since going into effect January 1.”

The Missouri Corngrowers Association, predictably, disagrees, but let me just say, before I present their side of it, that Mark Twain’s observation is particularly apt here: “Tell me where a man gets his corn pone, and I’ll tell you what his ‘pinions is.” Anyway, here’s the corn growers’ spin:

“Removing the ethanol requirement in Missouri would only increase prices at the pump for already hurting consumers.”

The corngrowers tell us that using ethanol will save Missourians $285 million this year and over $2 billion over the next ten years.

Not so fast, says Steelman:

But Steelman said Tuesday that ethanol doesn’t make traveling any cheaper for drivers. “You don’t get as many miles per gallon burning the blend, the ethanol blend, as you do regular gas. So that if you’re not getting as many miles per gallon, you have to fill up more often at $4 a gallon,” the State Treasurer said.

Marshall [the Corngrowers Association CEO] pointed to a recent analysis by Merrill Lynch that shows that gasoline prices would be 10 to 15 percent higher without the ethanol supply in the marketplace. That translates into ethanol helping hold down gasoline costs to American drivers by 60 to 70 cents per gallon.

60 to 70 cents per gallon sounds impressive, until you hear what another right wing source, Show Me Institute, has to say. It points out that the ethanol industry is subsidized by taxpayers, so not only is Missouri gas not as cheap as it looks on the gas pump monitor, but diverting corn for use as fuel is driving food prices up. The Show Me Institute predicts the opposite of what the corngrowers are telling us: to wit, that ethanol use will cost Missouri consumers a billion dollars over the next decade.

Missourians don’t realize what our cheaper gas is really costing us: more students in every classroom, for example. We taxpayers put the money that should have gone to repair our roads into ethanol plants. Without subsidies, nobody would use the stuff because it’s expensive to produce. It needs huge quantities of nitrogen fertilizer (made from natural gas) as well as petroleum-based pesticides. So ethanol is not only not cheaper than using oil, but producing it uses oil anyway. Furthermore the runoff from the pesticides poisons our groundwater, and the nitrogen fertilizers ride down the Mississippi River to the Gulf of Mexico, where they “fertilize” algae and create a dead zone.

Besides all that, producing ethanol requires monstrous huge amounts of water–3 1/2 to 6 gallons of water per gallon of ethanol. What’s more, “with each gallon of ethanol you get 12 gallons of sewagelike effluent produced by the fermentation/distillation process.”

Now here’s the kicker. Salon.com has this bombshell:

The Bush administration states that corn-based ethanol only accounts for 3 percent of global food price inflation. ….

But now the U.K.’s the Guardian is reporting that it has laid its hot hands on a confidential World Bank report that makes the astonishing claim that 75 percent of the surge in global food prices can be attributed to biofuels.

The figure emphatically contradicts the U.S. government’s claims that plant-derived fuels contribute less than 3 percent to food-price rises. ….

Senior development sources believe that the report, completed in April, has not been published to avoid embarrassing President George Bush. “It would put the World Bank in a political hot-spot with the White House,” said one yesterday.

The Salon.com writer calls biofuel mandates a “crime against humanity.”

So, Ms. Steelman, on this issue, I agree with you.

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