Ethanol -- How Much It Really Costs Us -- Not A Bakken Story

One nice thing about the debate over the "Obama Tax Cut Bill" / "Bust Tax Cut Extension Bill" is: I am reminded how much ethanol costs us.

To garner more votes for this tax bill, there is a provision to extend the 45 cents/gallon subsidy for one more year for ethanol. I had forgotten that subsidy. And, of course, the federal mandate that a certain amount of ethanol must be added to gasoline.

That link by the way reports that the provision will also keep the 54 cents/gallon tariff on imported biodiesel fuel. Interesting, huh? No tariff on toys from China, but tariff on cheap fuel from Brazil to artificially keep our own energy prices up. (I'm shooting from this hip on this; I don't know all the particulars, but I bet I'm pretty close.)

Everyone pretty much agrees that the cost of ethanol helps keep price of oil and gasoline a bit higher than it would be without the ethanol factor. As much as I dislike ethanol (it costs as much energy to make as it delivers; it converts a foodstock into fuel), there may be some mitigating factors. But one has to admit, ethanol is nothing more than an agricultural subsidy.