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Running on Empty: U.S. ethanol policies set to reach their illogical conclusion
…Why would the United States, which now devotes 40% of its corn crop to the production of ethanol, import more than 4 billion gallons of ethanol from Brazil? And why would Brazil at the same time import a projected 2 billion gallons from the U.S.? Couldn’t we just save all those transactions costs and shipping-related greenhouse gas emissions by keeping our ethanol and cutting our projected ethanol imports from Brazil in half?
Not if your goal is to game the U.S. biofuel mandate.
With subsidies you often get what you pay for, just not always what everyone expected.
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Or maybe production is seasonal and thus imports happen in the opposite season?
Could be, but not the article’s point exactly, “They’ll take our low-grade corn ethanol if they can get a higher price for their sugar-based equivalent.” Corn ethanol from U.S. should be much more expensive than it is, but it is heavily “supported” by taxpayers.
North American corn monoculture had huge surpluses, farmers lobbied for price supports, green activists wanted “alternative” fuels, legislation was passed encouraging corn ethanol. Results: bubble (Canadian/U.S. farm companies heavily investing by clearing overgrown marginal farmlands and higher prices of agricultural land).
Then a drought causing a drop in yields causes farmers to lobby for more “help”.
Final result: higher taxes and higher food prices. Now I’m getting boring