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Biofuels Have Never Made Less Sense

Yet another effect of the plunge in oil prices over the past seven months: The case for biofuels has never looked flimsier. The FT gives a pretty damning summation of the current state of America’s biofuel boondoggle:

The biofuel industry initially grew with the political support from three constituencies: environmentalists, farmers and, in the US at least, the “energy security” lobby. Over the past few years, environmentalists have largely withdrawn their support for biofuels while shale oil has given the US their energy security without the need for biofuels.

Farmers, of course, would love to see this program continue; it gives them guaranteed buyers for their corn. But for every other stakeholder, this program makes no sense whatsoever. Corn-based ethanol’s green merits have been discredited. The economic rationale for blending more and more of the biofuel into gasoline was shaky to begin with, and with the recent oil price crash depressing gasoline prices to levels not seen in five years, whatever margins existed for ethanol plants have all but evaporated.

The smart move would be to take advantage of the changing market climate and scrap the biofuel mandate altogether. Bills are working their way through Congress now, but the sooner we can put this “green” policy experiment in our collective rear view mirror, the better.

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  • Boritz

    A program is implemented when it is unjustified and does worldwide damage to food production. Then its continuance becomes a test of sanity and where are we: Sure hope they don’t keep goin’ with that but who knows what they’ll decide.

  • Corlyss

    “Now the policy looks downright farcical”
    Unfortunately that can be said about a lot of public policy.

    “environmentalists have largely withdrawn their support for biofuels”

    That’s because they and their patron saints were NEVER about cheap energy. They were about hostility to wide-spread Western-style prosperity for everyone. They became paranoid at the thought of non-Western nations aping their betters in pursuit of Western economic security and prosperity, which was all founded in part on cheap fossil fuel energy. It’s no secret that as the Communist world appeared to dissolve, the old Communist ideologues and many of the new more rabid kind flooded into the “green” movement to push for their vacuous managed systems to counter Western prosperity.

    • Jacksonian_Libertarian

      Watermelons, Green on the outside, Red on the inside.

  • Andrew Allison

    Interesting that with all the commentary on the effect of declining oil prices, this is the first commentary I’ve seen on it’s impact on biofuel. As TAI has long held, biofuel not cost-effective and it’s environmental impact is negative. Unhappily, the primary beneficiary (Big Ag) owns lots of legislators, so the gravy train seems likely to continue.

  • FriendlyGoat

    In 2013, the corn-producing states in descending order were Iowa, Illinois, Nebraska, Minnesota, Indiana, South Dakota, Kansas, Ohio, North Dakota, Missouri, Wisconsin, Michigan, Texas, and then a dozen or more lesser producers.

    Why would anyone think that the new Congress is going to do anything perceived as negative to the farm community in these states? Growing food for fuel NEVER made any comprehensive sense, but that wasn’t the point then and it isn’t the point now.

  • Rich K

    These Pigs at the trough come in all political flavors no matter the affiliation so I see Not One Inch going forward in tossing these worthless programs in the bin.

    • FriendlyGoat

      Pigs? What do I remember about Senator Joni Ernst of Iowa? You think she’s going to castrate the corn-to-gas-tank players of Iowa and “make ’em squeal”?

  • f1b0nacc1

    If you want to kneecap the Biofuel lobby, I offer a simple suggestion. Move the Iowa caucuses from their position at the head of the presidential campaign season. Without that leverage, there is very little chance that programs such as biofuels (which benefit nobody other than ADM) would have any real support whatsoever.

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