The appended article begins with the words:  "With the Bush Administration touting ethanol as the great hope for easing gasoline prices, just the opposite is true."

Good grief --- is it possible the Bush Administration fibbed to us?

I do hope that those conservationists who tout ethanol as a savior, will reconsider. And, for what it's worth, cellulosic ethanol isn't going to be a savior either.

I suppose it's attractive to believe that there are going to be quick, easy, painless, supply-side techno-fixes which will let the wheels keep turning until they grind to a halt.

Scott 

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http://www.thedesertsun.com/apps/pbcs.dll/article?AID=/20060620/COLUMNS03/606200314/1081

Ethanol not such a great savior after all

Morris R. Beschloss Special to The Desert Sun June 20, 2006

With the Bush Administration touting ethanol as the great hope for easing gasoline prices, just the opposite is true.

No less an economic expert than J.P. Morgan analyst James Glassman claims that "retail gasoline prices would probably be between $2.30 and $2.40 a gallon," if not for the governmental mandate of an increasing percentage of ethanol as a gasoline additive.

Although other economists may not agree on the exact amount of such a price premium, all believe that the required use of ethanol does push up the total price per gallon. The cost of ethanol has soared 65 percent to $4.50 a gallon since early in May when the required ethanol demand far exceeded the available supply. This has resulted in an unexpected price total per blend, which has been pegged at the 10 percent use of ethanol required by congressional decree.

A comment by Shell Oil's CEO John Hofmeister during a Sunday "Meet the Press" television appearance with moderator Tim Russert also asserted that the achievement of energy independence by Brazil was a distortion of facts.

Although Brazil's crude oil demand is only 6 percent of that needed by the U.S., Hofmeister claims that "even that demand is comprised of only 20 percent ethanol made from cane sugar."

He adds that the rest has been supplied by a stringent Brazilian energy policy requiring maximum utilization of both offshore drilling, as well as production of all available onshore reserves. Hofmeister further cautions that the government-mandated gasoline/ethanol blend provides 25 percent less mileage than the comparable use of gasoline with the former MTBE additive.

What is also not well known by the American public is that the price of corn derivatives are being driven considerably higher, as ethanol is taking up an ever-increasing amount of this previously abundant farm product.

It's questionable whether the generous subsidy provided corn farmers three years ago, to match similar European subsidies, will now be lifted. While the blame for high gasoline prices is being spread all around, the Bush Administration and Congress certainly have a responsibility to come clean with the American people regarding the distortions of ethanol's benefits to 230 million automobile and truck drivers.

^^^^^^^^^ END ^^^^^^^^^^^^

Written by me in 2002:

    For whatever it might be worth, I am unusually familiar with this issue, having lead the Ethanol Fuel Process-Development Research Team for the world largest enzyme manufacturer (NOVO) in the early '80s. Developing fuel alcohol manufacturing processes for companies such as ADM was how I made my living.

    In the ensuing years, fuel ethanol has evolved into a boondoggle of extraordinary proportions.  The use of ethanol in fuels results in a massive transfer of money from your pockets into the pockets of ADM and those of Midwestern corn farmers while doing little (if anything) to benefit the environment. The federal fuel alcohol subsidy program exists to promote corporate welfare, to reward ADM for their political massive contributions AND to allow George Bush to purchase votes in the corn belt (using your money to do so).
 

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