Time for Second Thoughts on the Ethanol Mandate

From The Heritage Foundation.

The anger over high gasoline prices was the main impetus behind the 2005 and 2007 energy bills and their successively higher ethanol mandates. The public may have mistakenly assumed that ethanol is cheaper than gasoline, but reality is beginning to hit home. When everything is taken into account, including the lower fuel economy from ethanol-blended fuel, the mandate is adding to the cost of driving—which is precisely why ethanol had to be mandated in the first place. The AAA calculates that ethanol has recently cost 20 to 30 cents per gallon more than regular gasoline.[1] And that does not take into account the heavy taxpayer subsidies, including a 51-cent-per-gallon tax credit, without which ethanol would be even costlier.

Gas prices have risen 20 to 30 cents more per gallon for gas due to ethanol mandates. But that isn't the only bad news.

Ethanol is also more expensive to use in the summer: It contributes to smog and in several markets can be used only with a costlier base blend that compensates for this shortcoming; but this blend must be used year-round. Over the longer term, the law requires that corn alternatives like cellulosic ethanol be used as well. Cellulosic ethanol—made from certain grasses, wood, or crop waste—is currently far more expensive than even corn ethanol.

But on the good side, corn used to be $2 per bushel. Now it is above $5 per bushel.

We keep on messing with good old gas and keep getting higher energy prices. The full article is a very interesting read. Also note the several citation to supporting articles -- something one will not find in articles from Reuters or AP.