May 2, 2007 -- Gas prices are skyrocketing as the high-demand summer season rolls in, and Bloomberg News predicts that some pumps may soon hit four dollars per gallon.
Along with high gas prices come the calls for Americans to diversify our energy sources and reduce our dependence on foreign oil. But be skeptical of politicians who tout ethanol as the clean-burning solution to our energy crisis.
Are gas prices hitting a "record high"? Don't believe what you hear from the media about that. Reporters often forget to adjust for inflation. Gas prices were higher in the 1920s and the 1980s.
Read more about this in "Myths, Lies, and Downright Stupidity." Purchase the book here.
The Miracle Solution?
The idea that ethanol is the answer is a myth. Ethanol is one thing that both Republican and Democratic candidates agree on this campaign season. Sen. John McCain, R-Ariz., and former New York Mayor Rudy Giuliani voice their support for the corn-based fuel, and Sens. Hillary Clinton, D-N.Y., Barack Obama, D-Ill., and former Sen. John Edwards want the government to subsidize ethanol production. According to former Massachusetts Gov. Mitt Romney, "The economics of ethanol make more and more sense."
Ethanol "makes sense" to these politicians because, they say, it's a clean and renewable energy source that will slow global warming, protect the environment and reduce our dependence on foreign oil. Plus, it just sounds good: Ethanol's made from corn, and we grow corn, so it just seems natural.
But if ethanol made so much sense, we wouldn't have to subsidize it or mandate its consumption. Jerry Taylor of the Cato Institute said, "If you can make a profit in this economy by putting something on the market, the government doesn't need to put a gun to your head."
But ethanol producers do need the help of government subsidies if anyone is going to buy their product, because without subsidies it would cost much more than gasoline. And critics point out that the idea that ethanol is good for America in terms of energy prices, foreign policy or the environment is a myth.
The Ethanol Process
As Jerry Taylor reminded us in his interview on "20/20," when ethanol is produced "it takes a lot of fossil fuels to make the fertilizer, to run the tractor, to build the silo, to get that corn to a processing plant, to run the processing plant." Then there's the energy it takes to move the ethanol around. Because ethanol degrades, it's not possible to transport it in pipelines like we do oil, so using ethanol means putting many more polluting trucks on the road to deliver it.
Because of that, a number of recent studies show that it takes just about as much energy to produce ethanol as you get when you burn ethanol. "Its net energy balance is zero, more or less," said Taylor.
On top of this, emissions from ethanol-fueled cars are no cleaner for the environment. According to atmospheric scientist Mark Z. Jacobson of Stanford University, a switch to ethanol won't do anything to address climate change and ethanol fumes may actually be worse for public health than the fumes from gas-powered vehicles.
Emissions from ethanol-fueled cars contain more of the carcinogenic chemicals formaldehyde and acetaldehyde, Jacobson said, and the vehicles will also boost atmospheric levels of ozone, a major component of smog, which will weaken people's immune systems and cause lung damage.
Also, the increase of corn production to make the ethanol will lead to the use of more fertilizer and more pesticides, and that will create more greenhouse gases.
Why Do Politicians Like Ethanol?
So if ethanol isn't any cheaper or better for the environment, why is it so popular among politicians?
"It's no mystery that people who want to be president support the corn ethanol program," said Taylor. "The first caucus is in the state of Iowa, and if you're not willing to sacrifice children to the corn God you will not get out of the Iowa primary with more than 1 percent of the vote."
Presidential candidates know that if they want to do well with Midwest voters, they need to buddy up with corn producers. By pushing to subsidize ethanol, candidates are able to keep voters happy in critical Midwestern election states, and seem like friends of the environment. It also lets them convince voters that we're moving toward the hallowed state of "energy independence."
When I interviewed Sen. Evan Bayh of Indiana, he griped that "we have allowed our dependency on imported petroleum to grow and grow and grow -- that's not healthy for our country."
I asked Bayh, "But isn't the ethanol program robbing Peter to pay Paul -- with all of us being the Peters and the corn producers being the Pauls?"
"You're currently being robbed to pay sheiks in the Middle East," said Bayh. "Doesn't it make more sense to have Middle Western farms producing America's fuel?"
How Much Relief Does Ethanol Offer?
But ethanol won't cure our dependence on foreign oil. A study published in the Proceedings of the National Academy of Sciences says even turning all of America's corn into ethanol would only meet 12 percent of our gasoline demand.
And the idea that Middle Eastern countries could just withhold petroleum from us and "hold us hostage" is "nonsense," said Taylor. "Heck, they're held hostage to us -- 80 to 90 percent of their federal revenues come from oil sales [so] they have to sell oil, [because] they have no other business to be engaged in!"
He's right. Even if OPEC refuses to sell petroleum to us, all of the world's oil ends up in the same bathtub -- our enemies will sell to SOMEONE who will sell to someone who will sell to us.
When a fuel source is expensive and bad for the environment and won't help our foreign policy, then there's no reason to force taxpayers to foot the bill for producing it.
"This is a naked transfer program designed to take money from people who buy corn and to give it to people who grow corn and people who make ethanol for a living. That's all it is," said Taylor.