Via Peter Gallagher, I saw this NY Times article on ethanol subsidies, which referred to an old Obama speech where he said the following:
Greater Brazilian production of renewable fuels could boost sustainable economic development throughout Latin America, and reshape the geopolitics of energy in the hemisphere, reducing the oil-driven influence of Venezuela's Hugo Chavez. The more inter-hemispheric production and use of ethanol and other biofuels occurs, and the more such indigenously-produced renewable fuels are used to replace fossil fuels, the better it is for our friends in the hemisphere.
As it relates to our country’s drive toward energy independence, it does not serve our national and economic security to replace imported oil with Brazilian ethanol. In other words, those who advocate replacement of US-based biofuels production with Brazilian ethanol exports however well intentioned they may be, are both misunderstanding our long term energy security challenge and ignoring a valuable foreign policy opportunity. The U.S. needs to dramatically expand domestic biofuels production, not embrace a short term fix that discourages investment in the expansion of the domestic renewable fuels in industry. Also, accelerating technology advances and transferring the technology to our neighbors in the Caribbean and South America will help them employ their own resources to produce environmentally clean ethanol to reduce their imported oil bill, thereby promoting economic stability in the Caribbean and South and Central America and strengthen the U.S.-Brazil relationship.
So imported Brazilian sugar-based ethanol is bad because it undermines U.S. corn-based ethanol. But as the NY Times article says:
Corn ethanol generates less than two units of energy for every unit of energy used to produce it, while the energy ratio for sugar cane is more than 8 to 1. With lower production costs and cheaper land prices in the tropical countries where it is grown, sugar cane is a more efficient source.
Here's what I'd like ask Obama: How much will it cost U.S. consumers to keep a permanent system of protection in place to allow corn-based ethanol to compete with more efficient sugar-based ethanol?
