This calculation comes from Ken Glozer’s opinion piece in last Thursday’s Washington Times. Here’s the pertinent paragraph:
The EIA forecast shows that current federal ethanol policy produces a minuscule additional amount of ethanol over what would be produced using a competitive market policy in the foreseeable future. In 2010, a mere 600 million gallons of additional ethanol were produced, roughly 5 percent of the 13 billion total gallons produced. In 2015, federal policies will increase production by just 1.4 billion gallons. The latter is less than 1 percent of U.S. gasoline consumption, and the cost per barrel of petroleum import reduction is an astounding $2,171.
Read the whole thing here.
A barrel of oil on the international market today trades for about $95, which means that America’s misguided ethanol policy is furthering “energy independence” at a cost of more than $2,000 per barrel of foreign oil reduced. What a rotten deal!
Mr. Glozer’s Washington Times op-ed was derived from his excellent new book, Corn Ethanol: Who Pays? Who Benefits? Two weeks ago, the Competitive Enterprise Institute and the Hoover Institution co-hosted a Congressional briefing by Mr. Glazer on his ethanol research. Video of that presentation soon will be posted on this blog.
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So oil gets NO federal help in the USA. USA military in the Middle East are just in the resort areas. And the Navy are out just patrolling what???? must be just using surplus hydorcarbon fuels.
I would defend ethanol, but lets get the true price of a gallon of gas delivered to the consumer first.
Thursday April 8 2010 Follow Us On Question of the Day . ..The editorial Stop Big Corn Opinion Monday did not accurately describe the analysis of ethanol policy conducted by our institute…The editorial says we at the University of Missouris Food and Agricultural Policy Research Institute estimate that the ethanol blenders tax credit increases the price of corn by 18 cents per barrel. This appears to be a reference to a report we issued in March that looked at the impact of extending the 45-cents-per-gallon ethanol tax credit the 54-cents-per-gallon ethanol tariff and the 1-per-gallon biodiesel credit. Individually each of these policies would have a smaller impact on corn prices…In addition the editorial says the Environmental Protection Agency is deciding whether to boost existing requirements that gasoline contain 10 percent ethanol to 15 percent.
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