Backed by government subsidies and mandates, hundreds of ethanol plants rose among the golden fields of the Corn Belt, bringing jobs and business to small towns, providing farmers with a new market for their crops and generating billions of dollars in revenue for the producers of this corn-based fuel blend. […]Congress set out to create an ethanol industry that would produce enough to make up 10 percent of every gallon of gas pumped into a car, but the lawmakers assumed that demand for fuel would grow. Instead, it has shrunk to 8.7 million barrels a day from 9.7 million in 2007, said Larry Goldstein, an economist and a director of the Energy Policy Research Foundation. And with corporate average fuel economy rules now in place to double the number of miles that the average car gets per gallon by 2025, “you know we’re on a trend,” he added.
The Gray Lady chose to focus on the struggling towns in Middle America being affected by these plant closures. This pain and uncertainty is very real for these Americans, and many will have their lives disrupted as these misguided government policies sputter and fail.But conspicuously absent from the NYT piece is any evaluation of corn-based ethanol as an energy source. As we wrote last month, a contracting ethanol industry is actually a good thing. Corn ethanol is a terrible fuel. Despite being a darling of the greens, it has been shown to actually increase greenhouse gas emissions. It raises the global price of corn, starving the world’s poor. And it’s terribly expensive—in 2010, the US spent more than $6.6 billion in biofuels subsidies.If Big Ethanol is really in trouble, as the tone of the article seems to suggest, we shouldn’t necessarily be in mourning. It won’t be easy for those who’ve staked their futures on this biofuel boondoggle, but there’s a significant upside to this particular American industry becoming a shadow of its former self.[Image of a withered corn crop courtesy of Shutterstock.com]