Background:
Since 2000 there has been several energy bills passed that have mandated and subsidized efforts by the U.S. to encourage the production of home-grown ethanol as an additive to gasoline. The use of ethanol as a gasoline additive was also increased when the pollution fighting fuel additive, MTBE, was found to pollute the ground water and was banned by many states.
Yes, ethanol is helping keep gas prices down.
Main Reference: USA Today
  • Ethanol is a renewable fuel. It contributes less greenhouse gases to the atmosphere than burning oil derived gasoline.
  • Ethanol is helping keep the price of oil down. Without biofuels, such as ethanol, the world would need one million more barrels of oil per day from OPEC.
  • The Department of Energy estimates that ethanol's lowering effect on oil prices has saved the average family $350 to $500 per year. This is in comparison to their estimated yearly increase in the cost of food due to ethanol production of only $15 to $25.
  • Ethanol is not the primary cause of higher food prices. A recent Purdue University study found that record crude oil prices were the single most important factor in higher grain prices. Oil is used on the farm, in food transportation, food processing and food packaging.
  • Ethanol has served as the safe replacement the pollution-fighting gasoline additive MTBE.
  • The use of corn for producing ethanol will in the future be replaced with cellulosic ethanol produced from lower cost non-food sources such as agricultural waste, wood chips, switch grass and municipal waste.

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No, diversion of corn to ethanol is bad policy.
Main Reference: USA Today
  • Currently 23% of the American corn crop is used to produce ethanol but only replaces 4% of our gasoline consumption.
  • Ethanol has not prevented gas prices from topping $4 per gallon.
  • The diversion of corn into fuel has contributed to rising prices from corn oil to beef.
  • The higher food prices have caused increased hunger and political instability overseas.
  • It too costly. The $0.51 per gallon U.S. government subsidy on the 9 billion gallons of ethanol to be produced this year will cost the taxpayers $4.6 Billion ($40 per average family).
  • We can not afford the massive disruptions to food costs that will result from the quadruple increases in mandates for "renewable fuels" between now and 2022.
  • Common sense says that diversion of over 23% of our corn crop to ethanol production will have a significant effect on food prices.
  • While the use of renewable fuels as replacements for oil is a laudable goal, it is better to reduce consumption through efficiency and development of alternatives to gasoline powered engines.

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